Gov. García-Padilla offers details of Coviden’s expansion in Ponce. (Credit: La Fortaleza/Jorge Santiago-Rivera)

Medical device manufacturers Covidien in Ponce and CooperVision in Juana Díaz confirmed Wednesday separate expansions that will create a combined 550 jobs in Puerto Rico’s southern region.

The announcements came during morning visits by Gov. Alejandro García-Padilla to both facilities.

Covidien, which currently employs 2,200 people at its Sabanetas Industrial Park campus, is adding 200 new jobs to operate its newly transferred “Tri-Staple” manufacturing line. As a result, the Ponce operation is boosting production at its 315,000 square-foot plant, the governor said.

Meanwhile, CooperVision in Juana Díaz, a subsidiary of The Cooper Companies Inc., is one of the largest contact lens manufacturers in the world. Through Law 73, the government has provided incentives to the company that will create 350 new jobs through the addition of 15 new production lines at a cost of $250 million.

The company currently employs 1,600 people at its southern plant.

“The success of a good economic plan is measured by its ability to create more and better jobs. It is essential to give a strong boost to the economy in the short term, while implementing strategies whose results will be seen in the medium to long term,” the governor said. “The announcements by these companies are showing that we are still a major player in the manufacturing world.”

PRMA President Waleska Rivera

The Puerto Rico Manufacturers Association is preparing to mark its 85^th anniversary during this year’s annual convention, when it will focus on ramping up its search for solutions to the island’s development and competitiveness challenges.

“During the recession of the past few years, the PRMA has been working hard to ensure that the manufacturing industry continues to remain afloat, contributing to job creation and economic development,” said Waleska Rivera, president of the trade group during a press conference Tuesday.

“We’ll mark 85 years by presenting solutions to help the island break the deadlock, by opening dialogue and building partnerships. This year, we’ll dedicate the convention to the in depth discussions of the issues that affect us all, to create economic development and create the jobs we need,” said Rivera, of the convention that will take place May 30-June 2 in Fajardo.

Over the years, the PRMA has been actively lobbying for issues “that benefit development and competitiveness,” Rivera said.

“From the struggles over Law 73 related to tax incentives, to the battle for true energy reform, to the resistance against maritime shipping fee increases, to the imposition of the 4 percent tax on foreign corporations, and the 10-point tactical plan to promote the development of the island, we have faced issues head-on on behalf of the island’s welfare,” she said.

Convention track includes local, stateside panelists
Local and stateside government leaders will be on hand for the convention, as well as keynote speakers who will address vital issues to the island’s economy. The agenda calls for a mix of educational and networking opportunities.

Congressmen Jim Gerlach, (R-PA) and Richard E. Neal (D-MA) — both members of the powerful Ways and Means Committee — along with Resident Commissioner Pedro Pierluisi will discuss the effects of the U.S. tax reform on the island. Meanwhile, a panel including Senate President Eduardo Bhatia and House Speaker Jaime Perelló, will discuss ways to bring Puerto Rico back to economic prosperity.

Many of the issues on the agenda follow up on the PRMA’s institutional 10-point strategy, which will also be the focus of a conversation with Gov. Alejandro García-Padilla.

“In the conversation with the [governor] we’ll discuss critical issues impacting our socio-economic development. Seven leading partners from various sectors will be in charge of presenting the concerns to the governor and our members,” Rivera said.

Meanwhile, another panel is scheduled to discuss Puerto Rico’s energy strategy, particularly the Puerto Rico Electric Power Authority’s plans going forward. College students graduating this year will have the chance to participate in a summit designed to help them connect with manufacturing industry professionals, said Carlos Rodríguez, chairman of the PRMA’s convention committee.

The warning letter related to quality systems issues resulted from an inspection conducted at that facility during October and November 2012.

The Añasco facility manufactures and finishes products that accounted for approximately 18 percent of the company’s consolidated revenues in 2012. Those products include many of its regenerative medicine collagen products, including Duragen Dural Graft Matrix.

The FDA’s warning letter includes, among other things, a request that Integra “prevent the distribution of collagen products manufactured at [the] Añasco site that do not have successful and complete validation studies.”

In response, on Feb. 15, the company stopped distribution of its collagen products manufactured in the Añasco facility to confirm that it had successfully validated them, and engaged a third-party consultant having appropriate quality system regulations expertise to confirm such validations, the company said in documents filed with the Securities and Exchange Commission Tuesday.

“Integra believes that it has already substantially remediated the issues addressed in the warning letter and is having third-party consultants assess its procedures and processes to ensure that products are manufactured in accordance with applicable regulations, as recommended by FDA,” it said in a statement, adding the validation process should be completed by Feb. 26, after which it will resume distributing the products in question.

Furthermore, the company — which can produce most of the mentioned products in its Plainsboro, New Jersey facility — also said it has reviewed the complaint history of the affected products and confirmed there is no indication that any distributed products pose a risk to patients.

This is the second time since 2011 that the FDA has pointed out flaws at the Integra plant in Añasco.

“The company takes this matter seriously. Any further actions by the FDA could have a material adverse impact on our financial position and operating results. The Company intends to implement corrective actions to address the concerns identified in the warning letter,” Integra told the SEC.

“The company cannot, however, give any assurances that the FDA will be satisfied with its response to the warning letter or as to the expected date of the resolution of the matters included in the warning letter,” it added. “Until the violations are corrected, the company may be subject to additional regulatory action by the FDA, including seizure, injunction and/or civil money penalties.”

Efrén Ocampo-López, CEO of Neolpharma Group

Less than four months after confirming plans to pick up the assets of the former Pfizer manufacturing plant in Caguas, Neolpharma officially inaugurated Tuesday its first operation on U.S. soil and the second established outside its native Mexico.

The company is part of a conglomerate that makes up one of the largest pharmaceutical companies in Mexico, specializing in manufacturing therapeutic products for conditions related to the central nervous system, algology, cardiovascular and oncology.

Neolpharma has more than 200 generic products in the market and more than 140 products in the development stage, of which at least 22 have innovative components, said Efrén Ocampo-López, CEO of Neolpharma Group during an inauguration ceremony Tuesday that drew participation from high-ranking government officials.

Neolpharma Group presently exports to more than 10 countries in Latin America, he added.

“As we settle in Caguas, we thank this island for allowing us to be part of its excellent human resources, in addition to presenting a platform for future export to various countries, especially with this plant that has the awards and certifications necessary to do so,” Ocampo-López said. “Puerto Rico stands out in the world stage for having a first-rate infrastructure that has allowed it to develop itself in the pharmaceutical industry with world-class quality products.”

Neolpharma’s entrance into the Puerto Rico market is the result of a deal struck with Pfizer in October 2012 through which it acquired the latter’s assets at a 32-acre facility in Caguas. There were 130 workers at the plant at the time, whose jobs were spared and are now part of the plant’s payroll of 270 employees.

“Through this plant, we will be entering the U.S. market by maintaining the manufacturing of some of the products that were manufactured here before, while we start to transfer our pharmaceutical products in 2014,” Ocampo-López said. “We’re certain that we will grow in Puerto Rico and we anticipate great success in this plant.”

During the expedited negotiation process, the executive said Neolpharma found “great support” from government and private sector representatives, some of which were on hand Tuesday. Representing the government were Economic Development and Commerce Secretary Alberto Bacó, Puerto Rico Industrial Development Company Executive Director Antonio Medina and Caguas Mayor William Miranda-Torres.

Neolpharma maintains alliances with some of the most important research centers in Mexico, including the National Institute of Neurobiology and Neurosurgery, the Biomedical Institute of the Autonomous University of Mexico and the National Cancer Institute, among others, as well as international entities such as the San Antoine Research Center of France and the French Institute for Health and Medical Research.

“Pay-for-delay” transactions reportedly cost consumers more than $3 billion each year in higher drug costs.

The Puerto Rico Justice Department has joined 19 other U.S. jurisdictions in an antitrust case filed by the Federal Trade Commission aimed at fighting monopolistic practices within the pharmaceutical industry that reportedly cost consumers about $3.5 billion per year in the form of higher drug prices.

The local agency got involved in the case after being invited by the State of New York, which filed a petition to intervene as “amicus curiae” in the FTC vs. Watson Pharmaceuticals case that questions a practice known as “pay-for-delay” through which a pharmaceutical company will pay companies producing bioequivalent (generic) medications to delay marketing them in cases where the patent validity is challenged in court.

That way, they can continue to charge higher prices than they could if competitors were allowed to sell generic versions of the drug.

“In that manner, the pioneer company is usually able to recoup its investment and gain a profit, sometimes a super-sized one,” said Findlaw.com in an assessment of the case. “The system of developing new drugs in this country exemplifies the maxims ‘no risk, no reward’ and ‘more risk, more reward.’ Developing new drugs is a risky, lengthy, and costly endeavor, but it also can be highly lucrative.”

This case dates to February 2009, when the FTC filed a complaint in the U.S. District Court for the Central District of California challenging agreements in which Solvay Pharmaceuticals Inc. paid generic drug makers Watson Pharmaceuticals Inc. and Par Pharmaceutical Companies Inc. to delay generic competition to Solvay’s branded testosterone-replacement drug AndroGel, a prescription pharmaceutical with annual sales of more than $400 million.

“At a time of escalating health care costs, these unlawful agreements deny patients the benefit of competition between branded and generic pharmaceuticals and ultimately cost consumers hundreds of millions of dollars a year,” said Acting FTC Bureau of Competition Director David P. Wales, at the time of the filing.

According to the FTC’s complaint, Watson and Par, via its partner Paddock Laboratories, each sought regulatory approval from the FDA to market generic versions of AndroGel.

Significant pay-offs
In their FDA filings, both companies certified that their products did not infringe the only patent Solvay had relating to AndroGel, and that the patent was invalid. The complaint charges that Solvay agreed to pay the generic companies to abandon their patent challenges and agree not to bring a generic AndroGel product to market for nine years, until 2015.

The agency claimed Solvay paid between $31 million and $42 million a year to preserve its annual profits estimated at $125 million, according to Reuters.

The Court’s ruling will likely resolve the case that has split the federal courts and which the FTC has pursued for more than a decade, said legal firm McDermott, Will and Emery in a recent article published in www.mondaq.com.

The FTC believes “pay-for-delay” should be deemed anti-competitive and illegal, a determination Jesús Alvarado-Rivera, deputy secretary of the Puerto Rico Justice Department’s antitrust affairs agrees with.

“These transactions cost huge sums of money to consumers, since large pharmaceutical companies seek to keep generics out of the market,” said Alvarado- Rivera. “The FTC estimates that these transactions cost the consumer more than $3 billion each year.”

“U.S. jurisdictions and the Commonwealth of Puerto Rico have a strong interest in protecting its consumers, while seeking to reduce their investments in medicines and protect the health of the population,” he added.

Only one in every 5,000 medicines tested for the potential to treat illness is eventually approved for patient use, and studies estimate that developing a new drug takes 10 to 15 years and costs more than $1.3 billion, Findlaw.com said.

More states are expected to join the case before the Jan. 28 deadline, local agency representatives said.

Jaime García (Courtesy: PRMA)

Following a seven-month evaluation process, the Puerto Rico Manufacturers Association has named Economist and Attorney Jaime García as the trade group’s new executive director, effective Feb 1. He succeeds William Riefkohl, who announced in the summer he would be stepping down from the post after 15 years.

The PRMA appointed a special committee to evaluate several candidates to assume the position that deals with handling lobbying strategies for the industry and providing continuity to the organization’s changing leadership, said PRMA President Waleska Rivera.

“The work of many years of our dear friend Billy Riefkohl has been instrumental in the leadership and strength of the organization and he is certainly a valuable person who can not be easily replaced,” said Rivera. “Fortunately, during those months he continued to collaborate with the PRMA, under contract, and now that the ideal successor has been identified, we will continue counting on his support in various committees,” said Rivera.

Riefkohl, meanwhile, said that having steered the PRMA’s course for so many years “was a school of life” and a perfect complement to his years of public service and the University of Puerto Rico.

“It is not just having been part of history but having been an active participant in it, for which I thank God and my family,” said the also former executive director of the Puerto Rico Industrial Development Company.

Now, the veteran executive will be the U.S. PhRMA Association’s representative in Puerto Rico.

García has experience, support
The PRMA’s new executive director has a significant curriculum vitae that starts with degrees in economy and law from the University of Puerto Rico, Mayagüez Campus and the Inter American University, respectively. Since 2001, he has worked as executive director of the Puerto Rico Mayors Association and has also served as director of economic development for the town of Carolina.

Prior to that, he was operations supervisor at Banco Popular and director of administration of the Municipal Revenue Collections Center (known as CRIM for its initials in Spanish). His resume also includes holding the post of deputy secretary of administration at the Consumer Affairs Department and acting as board member of the Puerto Rico Aqueduct and Sewer Authority’s, or PRASA.

His new appointment garnered praise from a trio of former PRMA presidents, Edgardo Fábregas, Pedro Watlington and Lucy Crespo, who described García as capable and prepared.

“He is highly ethical and upstanding, has a broad perspective of the issues and always seeks consensus, taking into account the opinions of others before making decisions,” said Fábregas, who currently chairs PRASA’s board.

Meanwhile, Watlington, who had a hand in García’s selection for the post, said “he is active, prepared and used to working as a team keeping Puerto Rico’s best interests in the forefront.”

Finally, Crespo, who also took part in the selection process, said García is “someone who weaves ethics, morality and professionalism together, so we are confident he will do an excellent job for the organization.”

The biopharmaceutical industry averages about 26.5 percent of Puerto Rico’s GDP and 57.4 percent in terms of output from the manufacturing sector, which contributes 46.4 percent of GDP, the Estudios Técnicos report said.

The biopharmaceutical industry is a major driver of Puerto Rico’s social and economic development, not just for the 86,000 direct and indirect jobs its creates, but for the multiplier effects it has upon other sectors.

However, despite its standing as the leading industrial component in Puerto Rico’s economic development since the mid 70s, the sector is facing a series of challenges that are putting pressure on its operations, namely: the rapid shifting of global biopharmaceutical production; cheaper drugs from low cost producers, such as China, Brazil, India, and South Korea; a surge in the production of generic drugs; and accelerating patent expirations, among others.

On Thursday, the voice of the local industry was heard through the “Economic Impact of the Manufacturing and Commercial Operations of the Biopharmaceutical Industry in Puerto Rico” report prepared by the Estudios Técnicos firm for the Pharmaceutical Industry Association.

The report quoted industry sources who listed a string of actions necessary to address some of those challenges, headed by the need to re-establish trust in doing business in Puerto Rico, taking urgent action to reduce the cost of doing business on the island and improving reliability and cost of infrastructure.

“Biopharmaceutical companies operating in Puerto Rico are facing increases in their cost of doing business following the October 2010 passage of Law 154,” said Economist José Joaquín Villamil, in charge of the presentation during PIA’s annual meeting.

The legislation, approved in one day and with no public hearings, imposes a 4 percent tax on certain transactions of nonresident companies operating on the island. Despite being blind-sided, most companies stayed put, striking benefit decrees with the government to continue doing business in Puerto Rico.

Still “the imposition of taxes goes against the government’s attempt to foster scientific innovation and will reduce Puerto Rico’s attractiveness as an export base for biopharmaceuticals,” Villamil said.

The industry gathering in Río Grande drew the participation of Gov.-elect Alejandro García-Padilla who said while his administration will not repeal Law 154 “because the government has made fiscal commitments with that money,” he vowed to provide incentives to the sector.

Biopharmaceutical companies reportedly paid close to $3 billion in taxes this year, of which $1.9 billion were attributed to Law 154.

García-Padilla vowed to meet with members of the pharmaceutical industry at least once a month to strategize on how to retain and attract companies.

The performance of the Puerto Rico economy leaves little room for not stimulating an aggressive strategy to retain key industrial activities in the island, said Villamil, while pointing out that refraining from providing incentives could precipitate an exit of plants to Latin America, for example, which is investing heavily in developing its export industry and, most importantly, has the additional attraction of massive domestic demand in countries such as Brazil, Argentina, Mexico and Colombia.

Economist José Joaquín Villamil (Credit: © Mauricio Pascual)

An X-ray of the sector
Although affected by the increase in costs and global conditions, Puerto Rico’s biopharmaceutical industry represents 18,000 direct and 68,000 indirect jobs, a total payroll of more than $1.1 billion and average salaries of $62,000 per year.

Villamil’s presentation also listed strengthening the relationship between PIA and the Puerto Rico Industrial Development Company to promote manufacturing development on the island, and promoting the development of additional R&D activities as sector priorities.

The industry also urged for consistency in applicable government policies, specifically those related to taxes, energy and labor. Furthermore, they asked for an update of biochemical waste disposal regulations and simplification of permitting processes particularly with respect to installing alternative energy sources.

While the biopharmaceutical industry accounts for more than 10 percent of private employment in Puerto Rico, on the commercial side, local product sales reached $2.8 billion in 2011, of which $900 million were generics. All of that activity was subject to sales tax payable to the Puerto Rico Treasury Department.

“The industry is concerned about access to innovative medicines in both public and commercial healthcare plans. The commercial component of the industry generates an additional 2,000 direct jobs,” Villamil explained.

Significant multiplier effect
The industry outsources upward of $150 million per year to local firms and has been responsible for the development of a clinical trials sector that already generates more than $35 million in volume and generates highly skilled jobs, he said.

This type of activity also provides the foundation for increasing R&D in Puerto Rico, which already boasts 10 investigative centers islandwide, the study stated.

In that sense, the sector also urged finding ways to strengthen ties among the government, academia and the industry.

“The industry can be considered as basic infrastructure in promoting future economic development. In many ways the biopharmaceutical industry is what can be called a ‘gateway sector’ in the sense that it provides linkages with the rest of the world and specifically with those sectors that are leading global growth,” the study presented Thursday concluded.

Eli Lilly’s plant in Guayama

Shooting down reports circulated Tuesday saying it planned to close its Guayama operation, pharmaceutical company Lilly del Caribe announced and launched a voluntary severance program for eligible employees working at the site.

This action is in anticipation of a reduction in the production volume of Cymbalta, one of the medical treatments manufactured in the site and whose patent will expire next year. The decision is unrelated to the performance of the Lilly plants in Puerto Rico, which have maintained a record of compliance with regulatory agencies, company officials said.

“The mission of the Lilly plants in Puerto Rico remains unaltered and they are not affected by this action,” company officials said. “In addition, this initiative will not impact our current commitments in Puerto Rico nor affects the company’s operational plans on the island.”

The separation program will impact approximately 40 employees at the Guayama plant, which produces the active ingredients for Cymbalta and Cialis.

Meanwhile, company officials said there are no plans to close the Guayama plant or either of Lilly’s other two Puerto Rico sites, located in Carolina.

(From left:) Economic Development and Commerce Secretary José Pérez-Riera, Chief of Staff Miguel Romero, Carlos Rivera-Vélez, vice president of manufacturing of Edwards Lifesciences in Añasco and Puerto Rico Manufacturers Association Executive Director William Riefkohl take questions from the media during a news conference Tuesday.

Medical device manufacturer Edwards Lifesciences will be investing $34 million to expand its Añasco facility, creating 263 jobs and retaining 52 existing ones, company and government officials said Tuesday.

California-based Edwards Lifesciences has been doing business in Puerto Rico since 1972, employing about 1,000 people at it’s Añasco complex, where it manufactures critical care technologies.

The plant is Edwards’ leading facility worldwide, company CEO Michael A. Mussallem said during a visit to the island last year.

“This injection occurs at a time when the economies of Spain, Greece and Ireland are plummeting,” Economic Development and Commerce Secretary José Pérez-Riera said during a news conference at the agency’s Hato Rey headquarters. “This company is ensuring the retention of intellectual capital that our most valuable resource, the Puerto Rican professional, provides.”

Earlier this month, Edwards reported net income for the quarter ended Sept. 30, 2012 of $69.2 million, or $0.58 per diluted share, compared to net income of $51.6 million, or $0.43 per diluted share, for the same period in 2011. The company reported a third quarter net sales increase of 8.5 percent to $447.9 million compared to the same period last year.

Edwards Lifesciences is the global leader in the science of heart valves and hemodynamic monitoring. The company partners with clinicians to develop innovative technologies in the areas of structural heart disease and critical care monitoring that enable them to save and enhance lives.

The company has both manufacturing and sales offices in Puerto Rico.

In an aside with News is my Business, Pérez-Riera confirmed that Edwards Lifesciences recently renewed its incentives decree with the government, signing on for another 15 years.

“That pretty much shows their commitment to Puerto Rico. The huge investment in this plant in Añasco reinforces the confidence Edwards Lifesciences has in the island’s business climate,” he said. “The local management’s leadership and the productivity of its workforce have been key factors in this new expansion.”

In 2002, the company marked its 30^th anniversary on the island with a major ceremony attended by government officials and then-governor Sila M. Calderón.

PeterPaul’s 23,500 square-foot facility in Fajardo offers customers coil winding, assembly operations, metal stamping and wide array of plastics molding solutions.

In 2011, PeterPaul Electric Inc. in Fajardo got a generous offer from the state of Connecticut to consolidate its Puerto Rico operation with that of its parent company’s in New Britain. Had that happened, it would have represented the exit of a company that for the past 40 years has been manufacturing coils and generating jobs along the island’s eastern flank.

However, the story had a different ending after the company received about $1 million in incentives from several government agencies — headed by the Puerto Rico Labor Department — to stay put.

So said Chief of Staff Miguel Romero Monday, when he visited and toured the company that employs about 50 people.

“Today we celebrate an achievement that has been the product of the collaboration and mutual support that has existed between the government and small businesses in Puerto Rico,” said Romero. “The example of PeterPaul Electric is one of initiative and action to provide assistance to a company, to protect local jobs, and maximize its growth potential for the benefit of our economy.”

PeterPaul’s 23,500 square-foot facility in Fajardo offers customers coil winding, assembly operations, metal stamping and wide array of plastics molding solutions.

“This is a history of collaboration that shouldn’t go unnoticed with a government that acts to help a local operation with a high growth potential,” said Michael Mangiafico, presidente of PeterPaul Electric. “We’ve been in Fajardo for about 40 years and our desire is to continue here. Without the help of the governor and his staff this would not have been possible.”

The company was one of many that saw its business activity and bottom line shrink, with problems peaking in 2011, government officials said. The financial assistance helped stabilize the company and allowed it to expand to new markets in Latin America.

“If Gov. [Luis] Fortuño had not intervened and led this rescue, PeterPaul would be closing its operations and not on track to expand our market and increase our contribution to Puerto Rico,” Mangiafico said.

Among the aid PeterPaul received were Puerto Rico Industrial Development Company incentives, Workforce Investment Act funds and the Department of Labor incentives for job creation and retention.

Pfizer’s Caguas site will be the company’s first manufacturing presence in the United States. (Credit: © Mauricio Pascual)

Mexico’s Neolpharma will be picking up the assets of Pfizer’s Caguas manufacturing plant, through an agreement that is expected to close during the first quarter of 2013, company executives announced Tuesday. The financial terms of the agreement were not disclosed.

The deal includes all of Pfizer’s real estate and assets at the 32-acre facility, where approximately 130 employees still remain. Pfizer said they will become employees of Neolpharma following the completion of the transaction.

In addition, approximately 60 employees will remain at the site as short-term Neolpharma employees, for a transition period.

“The sale of the Caguas facility is a positive outcome for our colleagues, for the Caguas community, and for Pfizer,” said John F. Kelly, vice president, strategy and transitioning sites for Pfizer.

“From the time Pfizer announced the company would exit the site in May 2010, we proactively marketed the facility in collaboration with the Puerto Rico government with the goal to retain as many manufacturing jobs as possible to help preserve the economic stability of the community.  Our team of committed and experienced colleagues at Caguas will be an asset to Neolpharma,” he said.

Neolpharma is a privately held pharmaceutical company with headquarters in Mexico.  It has approximately 1,500 employees, and produces medication for central nervous system, cardiovascular, pain, and oncology.  The Caguas site will be the company’s first manufacturing presence in the United States.

Pfizer’s Caguas plant was established in 1969 as a Searle/Monsanto facility.  It features nearly 475,000 square feet of manufacturing space, warehouse and administration facilities.

Currently, the site produces solid dose pharmaceutical products for global markets.  These include key therapies for central nervous system and pain management.

The majority of this volume will be transferred to other Pfizer facilities in Puerto Rico, while several products will continue to be produced in Caguas for Pfizer under a contract agreement with Neolpharma.

Pfizer has maintained a presence in Puerto Rico for more than 60 years, when commercial offices were established on the island.  Currently it employs close to 3,500 employees in manufacturing facilities located in Barceloneta, Caguas, Carolina, Guayama and Vega Baja, with commercial offices located in San Juan.

John O’Hara, general manager of the Janssen plant in Gurabo speaks as Gov. Fortuño (left) looks on. (Credit: © Mauricio Pascual)

Johnson & Johnson is expanding its presence in Puerto Rico through a $226.5 million investment that will improve its two plants in Gurabo and operations in Manatí and San Lorenzo, and add 308 new jobs to its payroll, company and government officials announced Monday.

Three of the plants are part of J&J’s pharmaceutical business, while the other belongs to the company’s medical device operations.

“For the past 30 years, Johnson & Johnson has bet on the Puerto Rican worker to contribute their knowledge and ability to the growth of this multinational company,” Gov. Luis Fortuño said during the announcement that took place at the pharmaceutical’s Gurabo plant.

“The expansion is a clear example that our economy is getting stronger as the economies of Spain, Greece, and Ireland are plummeting. We thank Johnson & Johnson for putting its trust in us and investing in our most valuable resource, our people,” Fortuño said.

This is the first piece of positive news come out in months about J&J’s Puerto Rico operations. Over the past year, the company has taken a significant beating from the U.S. Food and Drug Administration over production troubles at its McNeil plant in Las Piedras.

J&J’s Gurabo plant. (Credit: © Mauricio Pascual)

As News is my Business reported, in July, McNeil laid off 225 people at the plant, reducing production significantly.

Nevertheless, J&J still employs 3,000 people on the island, prior to the addition of he new jobs.

J&J’s investments include installing next-generation technology and equipment at its Gurabo plant that will allow Puerto Rico to compete globally. The additions include retrofitting the plant with freeze-drying equipment to create powders through the freezing process, as well as bumping up its parenteral operation dedicated to producing Remilcade, one of Janssen’s most important drugs.

Officials noted that the latter operation is the first of its kind that the company installs in the Americas. Also, by having this type of facility, Gurabo would be able to receive other injectable drugs as long as it remains competitive, officials said.

The production line at the Caguas plant includes Clorox Liquid Bleach, Lestoil and its varieties, Mistolin, Clorox and its fragrance varieties, Clorox Color and Clorox Intense White cleaning goods.

To mark its 100 years of doing business worldwide, The Clorox Company recently completed a $2 million upgrade and expansion project at its manufacturing plant in Caguas.

During a walk-through of the facilities Thursday, company officials said remodeling project integrated eco-friendly measures, including installing high-efficiency lighting with motion sensors to make more efficient use of power throughout the plant, installing special windows and high-efficiency hand dryers to reduce paper use.

The plan also included rebooting the recycling program and cutting down waste at the offices and the manufacturing plant.

Furthermore, the investment also includes renovating offices and increasing capacity at its manufacturing and warehouse areas, expanding the structure with an additional 2,350 square feet of space at the Caguas plant, which has been in operation for 36 years.

“It gives us great joy to effect these changes that allow us to reaffirm our commitment to the economic development of Puerto Rico, providing more than 80 jobs to the community,” said Chuck McCallum, general manager of The Clorox Company in Puerto Rico. “We’re here, and now back better than ever in renovated facilities and with strict quality controls to offer Puerto Rican families the best home cleaning products.”

The production line at the Caguas plant includes Clorox Liquid Bleach, Lestoil and its varieties, Mistolin, Clorox and its fragrance varieties, Clorox Color and Clorox Intense White cleaning goods. Many of the products sold carry the “Made in Puerto Rico” seal, certifying that they are made locally.

The Bumble Bee plant in Mayagüez (Credit: lacallerevista.com)

Three months after announcing its decision to leave the island after 50 years of operations, Bumble Bee has hired San Diego-based Heritage Global Partners to auction off the assets of the former plant in Mayagüez, on Sept. 12 and 13. The sale will be conducted over the phone and online.

The sale includes Bumble Bee’s waterfront property (including the manufacturing building and other assets) as well as select pieces of surplus production and facilities support equipment. A pre-approved group of parties will be allowed to bid during a closed 30 minute session — from 7 a.m. to 7:30 a.m. — on Sept. 12, while a second global online “piecemeal” auction will open at 8 a.m. Sept. 12, and run until 10 a.m. the following day.

“Our upcoming auction of Bumble Bee’s extensive assets, including prime water front real estate, offers an excellent opportunity for companies in food and general manufacturing not only to acquire state-of-the-industry equipment but also to quickly relocate to an existing facility located in Puerto Rico,” said Heritage Global Partners Vice President George Wandachowicz.

Prospective bidders are encouraged to preview the Mayaguez site on Sept. 11 from 9 a.m.–4 p.m., or further in advance by appointment, the company said.

All prospective bulk auction bidders are required to wire transfer $250,000 to participate. The deposits are fully refundable at the end of the auction to non-winning bidders. There is no deposit required for participants in the online piecemeal auction.

The Bumble Bee tuna cannery in Mayagüez closed June 30, leaving about 260 people jobless, as News is my Business first reported.

Merck employs 400 people in Las Piedras.

Merck Puerto Rico announced it will invest some $80 million over the next year to expand production capabilities at its Las Piedras manufacturing plant.

The expansion includes installing new technologies and manufacturing equipment at the plant to support the continued growth of the company’s diabetes franchise around the world.

“This significant investment is a sign of the commitment and confidence that Merck has in [the] Puerto Rico operations and will bring a significant amount of production to the Las Piedras plant,” said Miguel Pagán, general manager of Merck Puerto Rico Pharmaceutical Operations.

“The expansion will help the company meet demand for our growing diabetes franchise, as well as other key therapeutic areas that are driving the company’s growth,” he added.

The Las Piedras plant, which opened in 1985, currently employs about 400 people and is a strategic site within Merck’s global manufacturing network that produces medicines for markets worldwide. The manufacturing site is making the necessary investments to begin producing Janumet XR, a treatment for Type II diabetes.

The company’s payroll is expected to remain the same, although the expansion guarantees the permanence of the plant in a town that just last week had to deal with the announcement of job cutbacks by another manufacturing resident, McNeil. The latter pharmaceutical will be eliminating 225 slots as it focuses on complying with correcting deficiencies detected by the U.S. Food and Drug Administration.

“The government of Puerto Rico is pleased to continue to support Merck with different types of incentives to further stimulate the investment of new production and technologies at the company’s facilities in Puerto Rico, and to promote employment for our skilled workforce,” said José R. Pérez-Riera, Secretary of the Department of Economic Development and Commerce.

“With this $80 million expansion by Merck to produce one of the company’s key products in Puerto Rico, we are pleased [it] is once more demonstrating its confidence in Puerto Rico and [in] its highly productive workforce to produce a world-class manufacturing platform,” he said. “This new $80 million investment adds to last year’s investment at the Las Piedras site to total more than $120 million of new company investment in Puerto Rico.”

Merck has a second plant in Barceloneta.