GlaxoSmithKline this week gave the UK government and several trade organisations reason to celebrate after announcing that it will build a new manufacturing facility in the country — the first in almost forty years. The facility will be dedicated to biopharmaceuticals and will create new jobs in Ulveston, Cumbria, which has been chosen for the new site.
In addition, GSK will make investments at other UK manufacturing sites in Montrose and Irvine (Scotland), Ware (Hertfordshire) and Barnard Castle (County Durham). Overall, the company will invest more than £500 million ($794 million) and create up to 1000 jobs. In a nod to the environment, some of the funding will be dedicated to environmentally friendly manufacturing technologies.
The investments are one of the largest commitments to the UK life-sciences sector in recent years.
Ulveston was chosen as the location for the new facility following a feasibility study that GSK conducted in 2011. Construction is estimated to cost £350 million ($555.66 million) and is anticipated to begin in 2014 or 2015. It is expected to take at least 6 years before the facility is fully operational. GSK also added that it is considering further investment at the site up to £700 million ($1.1 billion).
The company already has a site at Ulveston that employs around 240 people and manufactures key ingredients for antibiotics.
Other UK investments
More than £100 million ($158.8 million) will be invested at GSK’s Montrose and Irvine sites.
At Montrose, the investment will be used to enable the site to manufacture key materials for respiratory medicines, as well as aluminium adjuvants, which are used in vaccine manufacture. This will be the first time a UK GSK site will participate in the company’s vaccine manufacturing supply chain.
Meanwhile at Irving, GSK will increase production capacity for antibiotics in response to demand for these medicines in emerging markets. At both sites, GSK will also invest in green energy production and environmentally friendly manufacturing technologies.
Finally, investments totalling £80 million ($127 million) will be made at sites in Ware to increase manufacturing facility for the company’s upcoming respiratory inhalation device and at Barnard Castle to a centre of excellence for dermatology manufacturing.
UK pharma concerns
For years, stakeholders of the UK bio/pharmaceutical industry have been calling on the government to do more to encourage manufacturing investment from big pharma companies amid a fear that the country could be losing its “pharma lustre” (read the article from our columnist Nathan Jessop). Ironically, despite criticism, the UK has been busy launching a number if initiatives to strengthen its position in both R&D and manufacturing. Finally though, these efforts seem to be paying off. GSK’s CEO, Sir Andrew Witty, says that the UK’s patent box scheme, in particular, has been beneficial. The Patent Box is an initiative that will allow companies to apply for a reduced rate of corporation tax that on patented technology.
“The introduction of the patent box has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain. Consequently, we can confirm that we will build GSK’s first new UK factory for almost 40 years… We are also actively considering other investments in our UK manufacturing network which would create further jobs and reinforce the UK’s international competitiveness and as a world leader in life sciences.
GSK announced its investments following the release of the UK government’s 2012 Budget. In the GSK press statement, UK Prime Minister David Cameron said, “This is excellent news, a major investment that will create many highly skilled jobs and provide a great boost to the economy. It shows why we are right to cut business tax and focus on making the UK a dynamic and competitive place that can attract exactly this type of high tech investment.”
However, although the announcement has elicited a positive response from both the UK government and industry stakeholders, including the Association of the British Pharmaceutical Industry and the BioIndustry Association, the UK’s largest trade union, Unite, explained that the government must still do more. Although welcoming GSK’s investments, Unite national officer, Linda McCulloch, pointed out in a statement that “the pharmaceutical industry has seen a lot of uncertainty with over 10,000 jobs lost in the past five years”. She added, “We need to invest in the UK’s manufacturing skills base for the future. Once again, we call on the government to invest in the UK’s manufacturing skills base with a long-term solution.”