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Pharmaceutical Firm to Spend $100M to Expand Vaccine Plant in Durham

Posted December 14, 2006

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— Merck & Co. will invest an additional $100 million to expand a vaccine manufacturing facility now being built in Durham. The move will also create as many as 60 additional jobs.

However, one obstacle remains. Merck is expecting to receive $1 million in incentives from Durham County Commissioners, and they won’t take up the issue until January.

Ellen Reckhow, chair of the Commissioners, said no firm commitment can be made until then.

“This just came up in the past couple of weeks,” Reckhow said in an interview. “We had been hearing that we were in the running against one other place for this plant.”

The Commissioners can’t approve any deal with Merck before county residents have a chance to weigh in, she added.

“We’ve indicated that we will give this very serious consideration,” Reckhow explained, “but obviously we can’t promise anything until we have a public hearing.”

The incentives would be paid out over five years as reimbursement for infrastructure improvements and workforce training. They also would not be paid unless Merck completed the plant, Reckhow added.

The state agreed to no additional incentives, according to a spokesperson for Gov. Mike Easley.

If the Merck project moves ahead, it will be the second major economic development victory for Durham County in recent weeks. Quintiles Transnational recently announced plans to add 1,000 jobs in Durham after receiving a package of state and local incentives.

The plant announcement also capped a strong year for job creation in the county. “We’ve announced 2,852 jobs this year,” Reckhow said. Many of those are in the life science sector, with Eisai announcing a plant expansion and Parata Systems, United Therapeutics and Stiefel Labs adding jobs and facilities.

Merck already is investing $300 million in the massive 235,000 square foot plant now being built in Treyburn Corporate Park. Construction started in 2004. The plant is scheduled to be completed in 2007 and to employ 200 people. Production is expected to begin in 2009.

The expansion, which was announced on Thursday in Raleigh by Easley and Merck, will begin in 2007 and be finished in 2010. It includes 115,000 square feet of space for sterile processing, quality testing labs, and a high-speed packaging line. The additional facilities and workers will be utilized to support the manufacture and distribution of vaccines.

Merck received nearly $40 million in state and local incentives in 2004 when the company chose to build the vaccine plant in Durham. The County did not participate in that incentive package, Reckhow said.

“Merck’s expansion in Durham further strengthens North Carolina’s leadership position in the life sciences industry,” Easley said in a statement. “This decision shows the effectiveness of the state’s top ranked business climate and investments in education.”

Merck is based in Whitehouse Station, N.J.

“This expansion will significantly increase the capabilities of the Durham facility and position the plant to more effectively support Merck’s growing global vaccine business,” said plant manager John Wagner.
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