California Takes Biggest Hit as Pharmaceutical & Biotech Industry Closes 39 Plants in 2009

---

Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--As 2009 enters its final days, the Pharmaceutical & Biotech Industry will have closed the doors on 39 North American sites. When considering only reported closures of manufacturing plant and research sites, the tally of the potential unemployed reaches nearly 8,000 people across the United States and Canada. Adding further insult to California's ongoing economic ills, the embattled state claims the dubious industry distinction of having the most site closures in 2009, having lost eight plants and an estimated 1,400 jobs.

Click on image at right for a listing of North American Pharmaceutical & Biotech plant closures in 2009.

As operational redundancy, financial blues and a host of other reasons are offered for the closures, the stark reality is that these typically high-paying jobs will be hard to replace anytime soon. Traditionally, an extensively trained and competent worker from within the industry has had more options when seeking new work than those from other fields. But this is an era of industry "mega-mergers" (e.g. Pfizer/Wyeth and Merck/Schering-Plough), and only the most cost efficient will survive. There is an incredible abundance of talent from which to choose. Everyone from production technicians to the upper echelons of management will find slim pickings when almost everyone is laying off or instituting hiring freezes, until the worst is passed.

Every major pharmaceutical-biotech company now has a rather bluntly named "rationalization" department of some sort in place, which evaluates and decides the plants that will remain open. It was plain to see at the annual International Society for Pharmaceutical Engineering meeting held last month in San Diego that those leading these teams are obviously conflicted and realize the grave import of their positions. Many were part of the industry's glory days when new plant construction blossomed with no apparent end in sight.

Individual states, rather than regions, were used when analyzing the closures by geographic location, as virtually all of North America took a hit. It really is not a surprise that California would be at the top, as it has enjoyed great success in the past in attracting capital investment for new and expanded industry sites. The same holds true for the dual second-place holders, New Jersey and Puerto Rico, both of which have lost six sites this year and slightly less than 3,000 jobs.

According to a recent survey of data contained in Industrial Info's Pharmaceutical Tracker - Online Database, over the years, these closed facilities have generated 41 reported capital and maintenance projects with a total investment value of $370 million. Unfortunately, included in these figures are the reported costs of closing the sites. As in any circumstance, one's loss is another's gain, and the hope is that these plants will be purchased, negating the need to shut down and dismantle them. Such is the case with the Astellas Pharma's (Deerfield, Illinois) Grand Island, New York, plant at 3125 Staley Road. APP Pharmaceuticals LLC (Schaumberg, Illinois) has purchased the site, and plans to eventually upgrade it. The site is near its own plant on Staley Road. This project is being directed under the guidance of APP's new owner, Germany's Fresenius SE, which purchased the company in a $3.7 billion deal last year.

The loss of two Bristol-Myers Squibb (NYSE:BMY) (New York, New York) plants in Puerto Rico was a big hit. The company closed its facility in Mayaguez, which manufactured heart disease and diabetes medicines. Citing the need to cut down on manufacturing costs, the island's losses were amplified by the closure of another BMS plant in Barceloneta, which employed more than 200 people and produced two AIDS medications and an antibiotic. The company has no current plans to close its remaining production sites in Puerto Rico in the cities of Humacao and Manati.

While saying good riddance to a long, painful year, the actual numbers reveal that although the tally is harsh by any measure, the losses were actually less than those of 2008, when an astounding 64 plants and research sites were lost along with nearly 11,000 jobs. California also took the biggest hit in 2008, almost mirroring this year's stats, with nine plants closed and 1,380 jobs lost. New Jersey was not far behind, with seven plants closed and more than 1,200 laid off.

View Plant Profile - 1030156 1064847 1040871
View Project Report - 14003672

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.