Anatomy of a Pharmaceutical Plant: Final of a 3-part Series Examining the Financial Impact of New Plant Construction

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Reported by Annette Kreuger, Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Once construction has wrapped up and the validation process for a new pharmaceutical or biotech (pharma-bio) plant is complete, it is time to begin production. Not only does an operational plant manufacture drug products that improve the public’s physical health, but it also sets off a ripple effect beneficial to the financial well being of the host community, county and state.

In 2005, fifty-five grassroot Pharmaceutical & Biotech Industry plants began operations in the U.S. Industrialinfo.com is tracking 229 additional grassroot projects scheduled to begin construction in 2006 or beyond. Click on the image at right to view a chart showing the breakdown of these projects by market region.

The most obvious immediate benefit is of course realized in the form of new jobs added to the community. These positions typically pay a healthy $55,000 to $60,000 average annually and offer generous benefit packages. Whether 100 positions are added or 1,000, these new wage earners or "better" wage earners, have more to spend. The money flows into the local economy, benefiting a multitude of enterprises, ranging from the grocery stores to new housing. It is the direct opposite of the financial mayhem that occurs when a plant shuts its doors and lays off all of its employees.

New businesses tend to sprout up in the vicinity of large manufacturing plants, offering everything from lattes to oil-changes. Existing ones experience a surge in revenue as well. Hotels, restaurants and others in the service industry sector find their bottom lines improving through new business obtained from plant-related conferences, meetings and visitors.

Although these new plants often receive sizeable incentives that include extensive tax breaks, financial benefits are realized from the operation. A part of many incentive packages is a "buy local" clause for supplies. Also, the pharmaceutical-biotech company may be required to seek bids from local companies for any specialty subcontracting needs. As a plant operation matures successfully, site expansions become a viable possibility, bringing another round of financial benefits.

Schools, places of worship, charities and community organizations are just a few of the other groups that experience growth upon the successful addition of a new pharma-bio plant. Courses are added to the curriculums at both the high school and college level, to ensure qualified workers for these plants. Training ranges from basic maintenance programs to advanced scientific technology.

People tend to pray in both good times and bad, but having a gainfully employed congregation helps to fatten up the collection plate. Charities and community groups also tend to eventually experience substantial growth for the truth of the matter is, it is easier to give when one is "receiving" - a regular paycheck.

Given recent headlines announcing massive plant closures and the peril they pose to the economy, it has become increasingly evident just what a valuable and integral part of the community a pharma-bio plant is. While the whole era of a company town is somewhat passé, it isn’t hard to spot the prosperous locales around the country that serve as home to pharma-biotech plants. Large and small, these towns and cities tend to be identified by what are usually their largest employers and biggest philanthropists. So, it is no surprise that from coast to coast, the welcome mat is out. Beckoning big pharma and bio to come to town and stay.

Part 1 - Anatomy of a Pharmaceutical Plant - Part 1 in a 3-Part Series Examining the Financial Impact of New Plant Construction
Part 2 - Anatomy of a Pharmaceutical Plant: Second in a 3-Part Series Examining the Financial Impact of New Plant Construction

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