NORWICH – One of the county’s largest employers is looking to invest nearly $10 million in renovations and new technology as part of an initiative expected to create jobs and double revenues over the next four and a half years. They are seeking the assistance of the Chenango County Industrial Development Agency to make it possible.
“Adding new technologies, and broadening our services, are both key steps in ensuring our long-term viability here at Norwich Pharmaceuticals, and increases the strategic value of the Norwich site,” said Chris Calhoun, president of Norwich Pharmaceuticals.
Norwich Pharmaceuticals, which traces its roots to Norwich Pharmacol, has been active in the pharmaceutical industry for more than a century. Based in North Norwich, the company is an outsourcing manufacturer of pharmaceutical products. They also provide packaging and distribution services, conducts clinical trials and helps their clients navigate the regulatory process.
Since the company was purchased by AFI Partners, a New York City-based private equity firm, in 2007, Norwich Pharmaceuticals has made significant investments in growing both the volume of the business and diversifying product capabilities and services. This latest initiative is part of their five year growth plan, unveiled in 2008.
“We’re hopeful that we can take our existing customer base and offer them more services as well as attracting new customers,” explained Carolyn Gherardi, vice president of technical and development services.
According to Bill Vanorden, director of technical services, their plans include renovating approximately 4,000 square feet of their existing 375,000 square foot North Norwich facility; replacing their existing water purification system with a higher-capacity reverse osmosis system and installing containment equipment.
The project also involves an investment in new technologies which will allow Norwich Pharmaceuticals to offer broaden the range of services they provide.
“Project one will build a facility that will allow us to produce potent compounds,” explained Vanorden, which they currently do not have the ability to handle.
Equipment will also be acquired to allow for the manufacture of transdermal patches, which deliver active pharmaceuticals through the skin, said Vanorden.
The manufacturer also plans to modify and reopen its solvent facility. This process, which allows tablets to be coated, was discontinued in the mid-80s but is now in demand.
“We’ve had to turn business away because we have not had that facility operational,” reported Gherardi.
The result of the project will be not only to grow revenue, but also add jobs in Chenango County.
“The business has been growing ... we’ve been very fortunate to grow the employment base as well,” said Gherardi, who reported the company’s workforce has increased from 250 employees to 420 since 2001.
According the vice president, 24 full-time positions would be created by the end of 2010 as a result of the project with “ongoing employment increases” throughout 2011 and 2012.
In order to finance the project, Norwich Pharmaceuticals will need the assistance of the IDA. They are seeking roughly $9.9 million in a combination of tax-exempt and taxable bonds, which the IDA would issue on their behalf. The money would be raised by sale of the debt instruments to private investors, with the company being wholly responsible for their repayment.
“The investments summarized in our (bond) proposal represents tangible, positive evidence of the long term commitment to the Norwich Pharmaceuticals growth plan by our owners, AFI Partners, and will cement our strategic relationship with our sister company, Alvogen Inc.,” said Calhoun.
Norwich Pharmaceuticals is also seeking exemptions from New York State sales taxes on the purchase of materials of equipment, from state use taxes on the rental of equipment for construction and installation and from the mortgage recording tax.
According to Commerce Chenango President and CEO Maureen Carpenter, there will be no direct tax implication to Chenango County or its residents.
In a special meeting on Friday, the IDA board agreed unanimously to move forward with the bond process. The next step will be a public meeting, which has been scheduled for 2 p.m. on Monday, March 30 at the North Norwich Town Hall.
As part of the legal protocol for the issuance of the tax-exempt bonds, each affected taxing jurisdiction must be notified of the meeting. This includes the county, town and local school district in which the manufacturing facility is located.
Following the public hearing, the IDA and Norwich Pharmaceuticals will need the approval of the Chenango County Board of Supervisors before bonds can be issued.