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VOL. 123 | NO. 21 | Thursday, January 31, 2008

$5M GlaxoSmithKline Expansion Not Expected to Bring Jobs

By Eric Smith

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BIG AND BIGGER: GlaxoSmithKline will spend an estimated $5 million expanding and upgrading its President's Island facility, where it makes such products as BC, Goody's and Stanback headache powders. -- Photo Courtesy Of Glaxosmithkline

GlaxoSmithKline (GSK) is embarking on a $5 million expansion and upgrade to its Presidents Island facility, and while it won't mean new jobs in Memphis, the investment is nonetheless a boon for the local economy.

The enhancements include replacing old equipment and constructing a production area that will house the company's new manufacturing equipment.

The Middlesex, England-based company this week filed a $5 million permit with the city-county Department of Construction Code Enforcement for its building at 2149 Harbor Ave. The addition will bring new filling and packaging lines for its BC, Goody's and Stanback headache powders, said Karen Brown-Tyson, global communications manager for GlaxoSmithKline's global manufacturing and supply (GMS) division.

The company's Memphis facility manufactures several of its non-prescription consumer products - including those headache powders, as well as Polident denture cleanser, Poli-Grip Comfort Seal Strips and Chap-Et lip balm.

Brown-Tyson said the move will bring the Memphis facility and its production processes up to date.

"The manufacturing site is currently using older technology to manufacture Goody's, BC's and Stanback, which was inherited by the previous company (that) owned the brands," she said. "Over the past five to 10 years, GSK has been developing a new technology to enable the replacement of the older equipment, utilizing cutting-edge packaging equipment, which will support the future of these important products."

The company will build a 25,000-square-foot processing center that should be completed in June 2009, Brown-Tyson said. By next month GSK will choose a contractor to begin construction.

GSK employs 375 people in Memphis, although Brown-Tyson said the expansion won't result in the addition of more employees.

"We are not anticipating any new jobs as a result of this project, but looking to train our current staff to operate and maintain the new equipment," she said. "We are undertaking skill assessments of our current staff and providing the necessary training to be able to operate the new equipment."

Brown-Tyson also said that production at the company's Memphis site wouldn't increase with the expansion, only that it will give the facility a more efficient and advanced means for its manufacturing process.

This decision comes on the heels of GSK's recent announcement that it plans to lay off all 236 workers at its 400,000-square-foot pharmaceutical plant in Bristol, Tenn., starting in April, according to The Associated Press.

The company originally announced the closure in 2006 after reporting sales of its signature penicillin drug, Augmentin, significantly declined when the company lost patent protection and began facing competition from generic versions of the drug.

When asked if those workers would be offered jobs here, Brown-Tyson reiterated that the Memphis facility expansion won't include new positions.

This is the second capital investment GSK has made to its Memphis operation in the past year. In July, the company applied for a $1.8 million permit toward the $1.9 million warehouse renovation near its Harbor Avenue facility.

The 50,000-square-foot facility has been renovated and is being used as a storage facility, Brown-Tyson said.

GSK employs more than 100,000 people worldwide. It has 80 manufacturing sites in 37 countries, according to the company's Web site. Its over-the-counter brands include Nicorette, Aquafresh, Tums and Citrucel, while its prescription drugs include Paxil and Imitrex.

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