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Abbott Scores Big For Puerto Rico’s Manufacturing Industry; New $100 Million Investment Sends Powerful Message On Island’s Economy


March 8, 2001
Copyright © 2001 CARIBBEAN BUSINESS. All Rights Reserved.

Puerto Rico’s manufacturing industry finally scored big points this year when Abbott Laboratories recently announced that it would make a $100 million investment in its Barceloneta complex.

The multinational pharmaceutical company, established in Puerto Rico since 1969, will spend $40 million in the expansion of its fermentation plant. While this phase of the program will take only a year, future stages of the capital investment program will enhance the site’s infrastructure in order to maximize efficiency and productivity.

"The $40 million expansion of Abbott Puerto Rico’s fermentation plant will add 20 direct jobs and around 150 indirect jobs to the local economy. We want to continue strengthening our position as a leader in Puerto Rico’s pharmaceutical industry," said Harry Rodriguez, divisional vice president and general manager of Abbott Puerto Rico Operations.

Abbott Fermentation Products’ 400 employees produce bulk erythromycin, a critical component used to produce antibiotics like the company brand, Biaxin. The plant also supplies bulk erythromycin to 32 Abbott affiliates and 15 direct customers worldwide. The $40 million expansion will add new technology to accelerate the production process of converting bulk erythromycin into eryoxime, a basic component of Biaxin.

"Abbott’s Barceloneta plant is a world class operation. We are deeply rooted in Puerto Rico and look forward to deepening our roots for years to come," said Lance Wyatt, senior vice president of the Specialty Products Division for Abbott Laboratories, which oversees Puerto Rico’s operations.

Wyatt was in Puerto Rico to make the announcement during an event attended by Gov. Sila Calderon, Economic Development and Commerce Department’s Secretary Ramon Cantero Frau, Barceloneta Mayor Sol Luis Fontanes, government officials, and members of the pharmaceutical industry.

According to Wyatt, "The decision to expand our investment in Puerto Rico was carefully studied for over two years, though the final decision was reached a month ago. Among the issues considered was whether the changes we wanted to make would work and be cost-effective. This is the interim process that we have to go through before we determine how and where to invest capital."

Abbott’s incentives package was negotiated with the past administration. While the agreement had not yet been formalized at the time of the announcement, Cantero Frau was confident that the company’s tax rate would decrease to 2%–the minimum allowed by thePuerto Rico Tax Incentive Law–and a new job-creation commitment would be established.

Abbott’s four Puerto Rico operations–Fermentation, Pharmaceuticals, Diagnostics, and Chemicals–do not have formal R&D facilities established. Yet the company’s management team has freedom to design, build, and implement new processes for the plant’s pharmaceutical equipment and systems.

The company’s local management team is 100% Puerto Rican. In addition, Abbott Puerto Rico reported $1.7 billion in annual sales, representing 8% of Puerto Rico’s total pharmaceutical exports ($20.7 billion) and 12% of Abbott’s worldwide sales ($13.7 billion). The company purchases close to $124 million annually in local supplies, including 50% of the packaging supplies for Abbott Diagnostics.

"Abbott Diagnostics was the company’s first manufacturing plant in Puerto Rico to earn ISO 9000 certification, in 1993. The certification process, which usually takes a year to complete, was finished in six months. This is proof of the quality of the products that we make in Puerto Rico," said Rodriguez during a tour of the plant’s facilities.

Abbott Diagnostics’ 966 employees now produce more than 100 products, including therapeutic drug monitoring, drug abuse monitoring, and physiological diagnostics reagents. The plant, which manufactures 30% of Abbott’s total worldwide diagnostic production, also makes all the prostate diagnostics kits distributed worldwide.

"In 1996, Abbott Diagnostics engineers designed and created seven robotic stations where diagnostic kits’ bottles are filled, labeled, sealed, and packed in a single-line station. By the time the kit comes out, it is ready to be inserted in a box with the appropriate instructions and packed in large quantities," said Jose R. Cordero, Abbott Diagnostics’ plant manager.

"We have increased the number of bottles processed from eight per minute when it was done manually, to 80 to 100 per minute with the robot. In addition to improving production, the robots also prevent operators from doing repetitive tasks, avoiding future ergonomic problems," said Cordero.

Abbott Diagnostics’ quality control laboratory is made up of 100 technicians, all medical technology graduates. The plant also boasts 150 scientists, of whom 24 have doctorate degrees in life sciences, either in biochemistry or biology. Staffers also include engineers, Engineers, mostly in the manufacturing area.

"As long as we comply with regulations and company standards, we are free to improve our processes. Because of positive end results, Abbott Puerto Rico has demonstrated the capacity and competence to make certain changes to our manufacturing facilities. We have even exported some of the new technology designed at this plant to other Abbott facilities," said Cordero.

Abbott Puerto Rico’s heart may be its energy cogeneration plant. Housed in a five-story building, Abbott bought a 28,000 horsepower ship’s engine that produces 20 megabytes of electricity.

"Our cogenerator consumes 30,000 gallons of fuel oil daily and provides sufficient energy to supply a town with 30,000 residents. Although we still pay $1 million a month to the Puerto Rico Electric Power Authority, Abbott has been able to reduce its cost per kilobyte from nine cents to 7.5 cents," said Rodriguez.

"Most important is that in case of an emergency, such as when Hurricane Georges hit the island in 1998, our fermentation plant will continue operating. This helps the fermentation plant remain in Puerto Rico because operation costs are lower," said Rodriguez.

The Abbott complex in Puerto Rico also includes Abbott Pharmaceuticals. Established in 1971, the plant’s 400 employees manufacture 12 products, including some of the company’s leading pharmaceutical drugs. Among them are Biaxin, Hytrin Sec, Gabitril, and Depakote. The products are manufactured in 60 different dosages and distributed worldwide. The plant produces 60% of Abbott’s Pharmaceutical Products Division’s global sales.

Abbott Chemicals is the group’s newest facility. Built in 1994 at a cost of $250 million, it is the company’s largest single capital investment ever made. The plant has more than 200 employees and occupies 44 acres, including a 310,000 square feet state-of-the-art building south of the original Abbott site. Abbott Chemicals also manufactures Biaxin.

Sales, marketing and distribution operations for Abbott Puerto Rico are centered in Carolina, with more than 740 products from all Abbott product lines represented. They include hospital, pharmaceutical, pediatric nutritional, adult nutritional, and diagnostics products. When Abbott was first established in Puerto Rico back in 1943, this was the company’s original operation. It now has approximately 200 employees serving Puerto Rico and the Caribbean.

This Caribbean Business article appears courtesy of Casiano Communications.
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