Anatomy of a Drug Manufacturing Plant (Part 2 in a Three-Part Series Examining the Financial Impact of New Plant Construction)

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--As the actual construction begins on a new pharmaceutical or biotech plant, the positive financial impact continues to resonate across an incredible number of companies. For illustrative purposes, this brief will focus on Merck's (NYSE:MRK) $700 million Maurice R. Hilleman Center for Vaccine Manufacturing campus in Durham, North Carolina, within the Treyburn Corporate Park.

Merck assembled a formidable team of architects, engineers and contractors, including Turner Construction Company, Fluor Corporation (NYSE:FLR), Jacobs Engineering Group (NYSE:JEC), Flad & Associates, Affiliated Engineers Incorporated and the John R. McAdams Company. Initial plans called for a $300 million investment to construct the new campus. Market demands added subsequent expansions that boosted both the total square footage to more than 600,000 square feet, and the total investment value of the campus to more than $700 million.

All of the companies listed above worked through the various design and construction phases of the massive vaccines campus. Of course, a number of subcontracting firms and their skilled labor (carpenters, plumbers, pipefitters, painters) were also required for construction, benefiting the local and state economy. The entire construction process employed well over 500 throughout the life of the project.

The construction of an actual vaccine manufacturing plant calls for a staggering amount of both process and ancillary equipment from a variety of suppliers. Beyond the actual materials required for the buildings and the bioreactors, process controls and automation, ultrafiltration, process vessels and cleanroom equipment are just some of the key items needed. Piping is needed for delivering chilled water, deionized (DI) water, water for injection (WFI) and compressed air for cleaning, rinsing and drying activities. Other essential equipment includes filtration, washing and fill and finish equipment. The spec list for a job of this size and scope is seemingly endless.

In addition to the manufacturing units, an 80,000-square-foot warehouse (both cGMP (certified good manufacturing practice) and non-cGMP) and a 9,000-square-foot energy center were added. In the warehouse alone, a brief list of equipment required includes freezers, scales, mechanical and electrical instrumentation, computers, site communication and data collection equipment.

The shipping and receiving areas, pipe shop and mechanical control center must also be equipped. The energy center houses a vast array of equipment, including water and glycol chillers, air compressors, circulation pumps, condensation tanks, air compressors, dryers and mechanical control room areas.

Another project at the site added a 43,000-square-foot Quality Operations (QO) laboratory. Laboratories are equipment-intensive as well, with equipment costs alone running approximately 10% of the total project cost.

One project at the site, the $300 million, 200,000-square-foot Vaccine Bulk Manufacturing Facility (VBF)--won the company a prestigious ISPE Facility of the Year Award (FOYA) for 2012. The VBF allowed Merck to double its production of vaccine for the treatment of chicken pox and shingles.

While high-tech manufacturing equipment is to be expected, it is easy to overlook the somewhat more mundane products and services required for a new plant. Essential items needed include floor and wall coverings, cabinetry, window coverings, office furnishings, light fixtures, benches, signs and restroom fixtures. The list continues with parking lot paving and striping, external signage, landscaping and sprinkler systems.

The next and final article of this series will look at the financial impact that follows the construction of a pharmaceutical or biotech plant. Who gains what when the plant finally begins operations?

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.