West Pharmaceutical Services Inc. is investing $18.7 million to expand in Kinston, N.C., and turn its disposable medical products plant there into a facility that will make prefilled syringes and rubber components for vials.
``It is going to be a gradual transition over the next three to five years,'' said Don McMillan, president of the North American Pharmaceutical Systems division of the $913 million company headquartered in Lionville, Pa.
The company moved to its current plant in Kinston in 2004 after its original facility, located about four miles away, was destroyed in an explosion and fire in January 2003.
Six West employees died in the accident.
As part of the expansion, West will build a new facility next to its current building and connect the two with a walkway.
McMillan said transforming the site will create 154 jobs over the next three years and will give West two high-end pharmaceutical rubber plants in the United States - the other in Jersey Shore, Pa. - and five globally.
``This is the first step in a full-scale conversion of the plant to a pharmaceutical and biotech facility,'' said McMillan in an Oct. 30 telephone interview.
West makes rubber stoppers and seals for vials, as well as components used in syringes, intravenous delivery systems, and blood collection and diagnostic systems.
``The pharmaceutical and biotech markets are risk-averse and are demanding that their suppliers have dual-sourcing capabilities,'' McMillan said.
``We needed a second site in the U.S. dedicated to those products. This will double our capacity for Westar[-brand products] in North America and increase our global capacity for those products by 25 percent.''
McMillan said the 37,000-square-foot expansion will include a water-for-injection washing process, a clean room and 23 new pieces of equipment, including compounding equipment. He said the machinery and the clean room represent 75 percent of the investment.
When completed, the two-plant complex in Kinston will have 151,000 square feet and more than 400 workers.
The new facility will house two compounding lines that include mixers, blending mills and calender extrusion equipment for final finishing of the products.
``We will initially be putting in five custom-built compression molding presses, and eventually up to 10,'' McMillan said.
Previously, the blending and mixing operations were done at company plants in St. Petersburg, Fla., and Kearney, Neb. He said no decision has been made on where the disposable medical products currently manufactured at Kinston will be moved, but added that those two plants are likely candidates.
``Those products will be moved, either domestically or to low-cost manufacturing countries,'' he said.
McMillan said an open warehouse space will be converted to a clean room. The additional molding operations will start early next year, the compounding operations in the latter part of 2008 and Westar production in early 2009.
West released its latest earnings report Oct. 31. For the nine months ended Sept. 30, both sales, at $764 million, and profit, at $64.7 million, were up from the comparable nine-month period in 2006. The company is on pace to top $1 billion in sales for 2008, with gross margins near 30 percent.