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Eli Lilly Decision To Invest $250 Million Is Based On Quality Of Workforce & Business Environment
BY MARIALBA MARTINEZ
April 26, 2001
Eli Lilly and Co. (Nyse:LLY) left Puerto Rico manufacturers speechless with the announcement that it would invest $250 million to build on the island what could be the worlds largest biotechnology bulk product manufacturing company.
To top it all, the investment comes with the addition of approximately 300 new jobs, increasing Eli Lillys 900 workforce for the island by 33% to 1,200 employees, and no renegotiation for new incentives from the government.
"We are in the process of preparing the necessary documents to renegotiate the incentives we settled on under the 1998 Tax Incentives Law. But for the time being, we are counting on the current tax rates based on employees and amount of business. We expect to finalize the process by summer," said Maria Crowe, president of operations for Lilly del Caribe in Carolina, to CARIBBEAN BUSINESS.
"For more than 35 years, Lilly has enjoyed Puerto Ricos positive business environment. This project reaffirms our commitment to our presence on the island. Once the project is completed, our facility will be the largest biotechnology bulk production plant in Puerto Rico and possibly the world."
Crowe, who arrived in Puerto Rico last October, is still recovering from the number of details that need to be worked out for the new plant.
"Lilly chose Puerto Rico for many reasons, after looking at a variety of sites. The location is excellent and the company has good employees and a large pool of people for additional hiring. In addition, the companys experience during our time here has been positive. The financial incentives offered by the government were also significant," said Crowe.
Eli Lillys new plant will be incorporated as a Controlled Foreign Corporation under Internal Revenue Code Section 957, as are Eli Lillys three plants in Puerto Rico. The company has a bulk chemical synthesis plant in Mayaguez, where more than 200 employees produce the active ingredients for Prozac, Darvocet, and Axid, in addition to some parts of the supply chain for Evista.
Two additional plants are located at Puerto Rico Industrial Park in Carolina. One plant manufactures dry products such as tablets. The second is a bulk plant that ferments antibiotics. Close to 700 employees make up the two plants workforce.
In 2001, Lilly will begin hiring the 300 highly specialized employees that will be needed for the biotechnology facility when it starts operating in 2005. Most positions will be in the areas of microbiology, biochemistry, manufacturing operations, and support personnel.
"In order to staff the new building, we will probably move some personnel from the existing buildings in addition to external hiring. But our plans are to continue operating our three existing plants in Carolina and Mayaguez," said Crowe.
"Although it seems like a huge amount of money to spend on a plant, the biotechnology manufacturing process is very complex. Its a new facility, built from the ground up, with various kinds of sterile facilities required beyond the traditional ones found in bulk manufacturing plants."
The new plant will start producing Humalog, a biotechnology product derived from recombined DNA and used in the treatment of diabetes. In 1923, Lilly introduced the first commercial insulin drug and has retained since 1999 the No.1 position in the worlds insulin market.
Department of Economic Development and Commerce Secretary Ramon Cantero Frau said, "Lillys investment in Puerto Rico represents the kind of technology and business we are looking for. Today more than ever we need the incentives for [Internal Revenue Code] Section 956 that we are negotiating in Washington, D.C."
Carolinas Lilly del Caribe is the 10th largest healthcare products manufacturer in Puerto Rico, according to the 2001 CARIBBEAN BUSINESS Book of Lists. Established in 1965, the companys local plants produce Nebcin, Vancocin, Lorabid, Axid, Prozac, Zyprexa, Evista, and Keflex.
Elli Lilly and Co.s first quarter (1Q) 2001 registered $2.8 billion in sales, a 12% increase when compared to $2.5 billion for 1Q 2000. Net income decreased 5% to $806.8 million, or $0.74 diluted earnings per share, vs. $845.5 million, or $0.77 diluted earnings per share. The major pharmaceutical products sold during 1Q 2001 were Prozac/Sarafem, Zyprexa, Humulin, Gemzar, and Evista.
This Caribbean Business article appears courtesy of Casiano Communications.