Capital Construction Snapshot: Pharma-Bio Industry to Invest More than $3 Billion in Fourth-Quarter 2012 Project Starts

Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--With but a scant three months left of 2012, the Pharmaceutical-Biotech Industry is on track to an impressive finish in North America. The sector is set to launch a whopping $3 billion of capital construction and maintenance (MRO) projects during the fourth quarter.

Click on the image at the right for a graph detailing capital construction and maintenance projects in the Pharmaceutical and Biotech Industry that are set to begin in the fourth quarter of 2012.

That money is targeted for investment in 257 projects, delivering an average total investment value (TIV) of $12 million per project. The individual project values range from $1 million for scheduled maintenance programs, all the way up to $400 million to bring a large-scale manufacturing plant into compliance with the U.S. Food and Drug Administration (FDA).

Looking back to better comprehend this year's numbers, a total of 240 projects with a combined TIV of $3.6 billion began construction during the fourth quarter of 2011, according to Pharmaceutical Tracker - Online Database. While that number does reflect a slight dip for 2012 of 16%, almost all of that amount can be attributed to the construction of the $700 million Advanced Science Research Center project at the City University of New York (CUNY).

In terms of geographical locations for the projects, the Southeast region snared the top spot with $818 million spread over 48 projects. This total was helped along courtesy of the FDA and its sanctions against Johnson & Johnson's (NYSE:JNJ) McNeil Healthcare Tylenol plant in Las Piedras, Puerto Rico. The company is spending a reported $400 million to ensure the plant is in optimal condition.

Next up is the Northeast region, set to deliver 35 projects worth a combined investment of $516 million. Helping boost the region, a longstanding industry favorite, are plans for several major manufacturing expansions. Regeneron (NASDAQ:REGN) is expanding in Rennselaer (East Greenbush), New York. The company is adding 77,000 square feet to its existing 350,000-square-foot site, with 44,000 square feet planned for manufacturing and the remainder for administrative space.

Rounding out the top three is an industry stalwart, the Great Lakes region, which is expecting the start of 35 projects valued at $516 million. The largest of these is Northstar Medical Radioisotopes' (Madison, Wisconsin) plan for a grassroot radioisotope nuclear medicine plant in Beloit, Wisconsin. While originally targeted to cost nearly $200 million, the company now believes it can deliver the project for less.

Such is the nature of the industry itself, and with three months still left to the year, there remains a chance that a percentage of these projects will be delayed or put on hold. Nothing is ever definite until construction begins. And even then, changes happen.

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