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Pfizer to close Barcelonetas Cruce Dávila injectable-operation plant, leaving 350 jobless
Announcement comes after 250 Hersheys plant employees in Las Piedras learn of October shutdown
BY MARIALBA MARTINEZ of Caribbean Business
July 28, 2005
Pfizer Corp.s announcement that it will phase out by the end of the year its injectable-pharmaceutical-production plant in Barcelonetas Cruce Dávila, leaving 350 employees without jobs, is part of a process the company started when it acquired Pharmacia Inc. and doubled the number of its manufacturing plants in Puerto Rico.
The announcement was made by Carlos del Río, Pfizers vice president of manufacturing operations in Puerto Rico, during a one-on-one press session on Friday. He said the company is evaluating moving the Cruce Dávila injectable operation to Belgium, Ireland, or Michigan, where the scale of operation will be more cost-effective.
In 2002, Pfizer acquired Pharmacia for $60 billion, becoming the largest drug manufacturer in the world. In Puerto Rico, Pfizer added Pharmacias manufacturing operations in Arecibo, Caguas, and Barcelonetas Cruce Dávila to its plants in Fajardo, Vega Baja, and Barceloneta. After selling its Fajardo plant, the companys workforce averaged 4,000 employees.
"The lifecycles of our pharmaceutical drugs are shortening each year as generic-drug competition increases and blockbuster drugs patents expire," said del Río. "Companies now are moving toward more targeted, but perhaps less profitable, products requiring less manufacturing capacity. This is part of a transformation Pfizer is undergoing to remain an important player and competitor in the pharmaceutical industry, not only in Puerto Rico but globally."
Pfizers Cruce Dávila 56-acre complex houses two manufacturing processes, a 28,000-square-foot reactor-gallon facilitywhere 150 employees produce Celecoxib, the active product ingredient (API) for Celebrexwhich will remain open for the time being, and the injectable-process plant being closed, a 230,000-square-foot building. According to del Río, the company is looking for a buyer and there are several interested parties. Pfizer also may consider leasing the API plant to a contract manufacturer or selling both buildings.
The pharmaceutical giant has been strengthening its pipeline since the early 2000s with the acquisition of other companies such as Warner Lambert (in 2000) and Pharmacia.
Three of its key productsAccupril, Diflucan, and Neurontinalready have lost their patents. Zithromaxs patent is scheduled to expire at the end of 2005, while Zoloft and Norvasc face patent expiration in 2006.
"Once a patent expires on a pharmaceutical drug, generic competition lowers its sales by as much as 80% to 90% of its original revenue," said del Río. "Pfizers pipeline has more than 20 products that will be launched over the next five years and some products, particularly solid-tablet drugs, will be manufactured in Puerto Rico. This year we will begin producing Lyrica [for epilepsy seizures and neuropathic pain] and Zmax [adult antibiotic] in Vega Baja, and Indiplon [for insomnia] in Barceloneta."
The company is conducting a plant network strategy to evaluate the integration and cost-effectiveness of its global operations. In the next few months, the results of the study will be delivered with further recommendations that could bring more changes to Puerto Ricos manufacturing operation.
Hershey to close Las Piedras operation
The news of Pfizers closure comes on the heels of Hershey Co.s announcement that it will shut down its Las Piedras plant in October because it is an underutilized manufacturing facility. The plant has manufactured bubble-gum products such as Ice Breakers, CareFree, and Bubble Yum since 2000, when it purchased the operation from Nabisco.
The companys decision is part of a program to improve its performance and includes personnel reduction through voluntary retirement and mutual-separation agreements and streamlining other North American operations.
The news came as a surprise to the approximately 250 employees at Hersheys Las Piedras plant, who will now join the growing list of unemployed manufacturing-industry members. The company recently reported earnings of $215.6 million on $2.1 billion in sales during the first six months of 2005, with a 15% earnings loss.
This Caribbean Business article appears courtesy of Casiano Communications.