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Released January 14, 2014 | SUGAR LAND
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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--As 2014 slowly gathers steam, it is a good time to review the Pharmaceutical-Biotech Industry's capital and maintenance (MRO) project activity for 2013. In January, the industry had $15 billion set to launch construction over the next 12 months. A year later, that number took a dip to just more than $12 billion worth of projects that actually made it to construction as planned.
Click on the image at right for regional breakdown.
The drop is not unexpected, as projects are delayed or reworked for a variety of reasons, not the least of which is funding. Toss in an industry still reinventing itself while absorbing staggering patent losses, and the final tally looks surprisingly healthy.
In 2013, the North American Pharmaceutical-Biotech Industry turned in an almost mirror image of its capital investments in 2012. While the industry did not gain any traction over 2013 in terms of reported project starts, neither did it suffer a decline. In fact, it was almost a complete draw, with the 2012 project tally reaching $12.1 billion and 2013 turning in $12.2 billion.
As usual, many of the projects that did not start as planned were pushed off into 2013 and beyond--especially public and institutional projects, which are dependent on Uncle Sam writing all (if not a major portion) of the check. Others were impacted by the scores of mergers and acquisitions, as new owners revaluate pending capital plans.
With a total of 665 projects, 2013 delivered an average project investment value of $18.44 million. The projects range in individual value from $1 million scheduled maintenance programs all the way up to a whopping $1 billion grassroot plant.
The clear top dog for 2013 is Baxter International Corporation's (NYSE:BAX) (Deerfield, Illinois) $1 billion investment to construct a 1 million-square-foot plasma fractionation facility with purification and fill/finish suites. The facility will be equipped for the manufacturing of up to 3 million liters of blood plasma-based therapeutics. Initially operating under the code name "Project Marathon" during negotiations, the company brokered a deal to receive $210 million worth of incentives from the state for the project. The facility will be located within the 1,600-acre Stanton Springs development in Covington, Georgia.
In Boston, Massachusetts, Brigham and Women's Hospital kicked off construction of a $450 million project to house the Translational Research Building for the Future. Design by NBBJ Architects (Boston, Massachusetts), the 12-story, 350,000-square-foot LEED building's multiple research teams will focus on neuroscience and regenerative medicine. Suffolk Construction (Danvers, Massachusetts) is overseeing construction of the project, which is expected to be complete in 2016.
Pharma giant Merck & Company (NYSE:MRK) has tapped Integrated Project Services (Lafayette Hill, Pennsylvania) to serve as the engineering, procurement and construction (EPC) contractor for a $500 million upgrade and expansion of the company's massive vaccine campus in West Point, Pennsylvania. Comprising multiple projects spread through the next few years, this extensive, dynamic capital improvement program will evolve as needs are identified.
From a regional standpoint, the Southeast slipped ahead of the Northeast, with $2.4 billion invested into 105 project starts for 2013. This lead was a direct result of the aforementioned Baxter project.
The Northeast was in second place, with 77 projects worth $2.2 billion. One of the largest of that region's projects was the start of Siemens Healthcare Diagnostics' $175 million investment in its plant in Flanders, New Jersey. In addition to renovating the existing 160,000-square-foot plant, general contractor Sweetwater Construction (Cranbury, New Jersey) will construct and equip a 140,000-square-foot building that provides both manufacturing and warehouse capacity.
Rounding out the top three investment leaders is New England. In addition to the large Brigham & Women's project, other notable projects in New England for 2013 included Quest Diagnostics (NYSE:DGX) starting renovations of 200,000 square feet within a 500,000-square-foot former Hewlett-Packard (NYSE:HPQ) plant in Marlborough, Massachusetts. When complete in 2014, the $78 million facility will provide Quest with laboratory testing areas and administrative space. Suffolk Construction is part of the project team, which includes developer Atlantic Management Corporation (Framingham, Massachusetts).
View Plant Profile - 3055716 3042826 1512949
View Project Report - 300070134 300053167 300079582
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Click on the image at right for regional breakdown.The drop is not unexpected, as projects are delayed or reworked for a variety of reasons, not the least of which is funding. Toss in an industry still reinventing itself while absorbing staggering patent losses, and the final tally looks surprisingly healthy.
In 2013, the North American Pharmaceutical-Biotech Industry turned in an almost mirror image of its capital investments in 2012. While the industry did not gain any traction over 2013 in terms of reported project starts, neither did it suffer a decline. In fact, it was almost a complete draw, with the 2012 project tally reaching $12.1 billion and 2013 turning in $12.2 billion.
As usual, many of the projects that did not start as planned were pushed off into 2013 and beyond--especially public and institutional projects, which are dependent on Uncle Sam writing all (if not a major portion) of the check. Others were impacted by the scores of mergers and acquisitions, as new owners revaluate pending capital plans.
With a total of 665 projects, 2013 delivered an average project investment value of $18.44 million. The projects range in individual value from $1 million scheduled maintenance programs all the way up to a whopping $1 billion grassroot plant.
The clear top dog for 2013 is Baxter International Corporation's (NYSE:BAX) (Deerfield, Illinois) $1 billion investment to construct a 1 million-square-foot plasma fractionation facility with purification and fill/finish suites. The facility will be equipped for the manufacturing of up to 3 million liters of blood plasma-based therapeutics. Initially operating under the code name "Project Marathon" during negotiations, the company brokered a deal to receive $210 million worth of incentives from the state for the project. The facility will be located within the 1,600-acre Stanton Springs development in Covington, Georgia.
In Boston, Massachusetts, Brigham and Women's Hospital kicked off construction of a $450 million project to house the Translational Research Building for the Future. Design by NBBJ Architects (Boston, Massachusetts), the 12-story, 350,000-square-foot LEED building's multiple research teams will focus on neuroscience and regenerative medicine. Suffolk Construction (Danvers, Massachusetts) is overseeing construction of the project, which is expected to be complete in 2016.
Pharma giant Merck & Company (NYSE:MRK) has tapped Integrated Project Services (Lafayette Hill, Pennsylvania) to serve as the engineering, procurement and construction (EPC) contractor for a $500 million upgrade and expansion of the company's massive vaccine campus in West Point, Pennsylvania. Comprising multiple projects spread through the next few years, this extensive, dynamic capital improvement program will evolve as needs are identified.
From a regional standpoint, the Southeast slipped ahead of the Northeast, with $2.4 billion invested into 105 project starts for 2013. This lead was a direct result of the aforementioned Baxter project.
The Northeast was in second place, with 77 projects worth $2.2 billion. One of the largest of that region's projects was the start of Siemens Healthcare Diagnostics' $175 million investment in its plant in Flanders, New Jersey. In addition to renovating the existing 160,000-square-foot plant, general contractor Sweetwater Construction (Cranbury, New Jersey) will construct and equip a 140,000-square-foot building that provides both manufacturing and warehouse capacity.
Rounding out the top three investment leaders is New England. In addition to the large Brigham & Women's project, other notable projects in New England for 2013 included Quest Diagnostics (NYSE:DGX) starting renovations of 200,000 square feet within a 500,000-square-foot former Hewlett-Packard (NYSE:HPQ) plant in Marlborough, Massachusetts. When complete in 2014, the $78 million facility will provide Quest with laboratory testing areas and administrative space. Suffolk Construction is part of the project team, which includes developer Atlantic Management Corporation (Framingham, Massachusetts).
View Plant Profile - 3055716 3042826 1512949
View Project Report - 300070134 300053167 300079582
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
