Drugmaker plans $250 million expansion in Melrose Park

August 20, 2016

By Ryan Ori - View Original Article at Crain's Chicago Business

German drugmaker Fresenius Kabi is planning a $250 million expansion of its Melrose Park factory, allowing it to boost production of its injectable drugs.

In 2017, the company plans to start construction of at least four new buildings totaling at least 130,000 square feet, creating new space for highly automated manufacturing, offices, warehousing of materials, and utilities and infrastructure, spokesman Matt Kuhn said.

They will be built on land adjacent to Fresenius Kabi's 124,267-square-foot plant at 2020 N. Ruby St The company has used the existing building since 2008.

Construction will be completed by 2020, and the buildings will be in use by 2026 or earlier, after installation of equipment and regulatory approval of the facility, according to the company.

The larger, modernized facility will allow Fresenius Kabi to boost production of injectable drugs for uses such as anesthesia, pain management, cancer treatment and eliminating infections.

'A REAL NEED FOR THESE PRODUCTS'

"What it means for us is, we'll be able to meet the demand of our customers," Kuhn said. "Fewer companies are investing in this space, so there is a real need for these products. There have been shortages of these products in the U.S."

Fresenius Kabi is based in Bad Homburg , Germany. Its U.S. headquarters is in Lake Zurich. The company employs more than 1,500 people in Illinois, including more than 500 at the Melrose Park plant, Kuhn said. It also has workers in Skokie and Bensenville.

The company has more 2,500 U.S. employees, including other manufacturing facilities in North Carolina, New York and Pennsylvania.

The company is expected to add jobs at the expanded Melrose Park facility, Kuhn said , declining to say how many people it will hire. Existing employees will be retrained to work in the automated facility.

The project "represents hundreds of new high-paying construction and highly skilled permanent jobs in our community," Melrose Park Mayor Ron Serpico said in a statement from the company and the village.

SUBSIDIES

Melrose Park will contribute up to $15 million in tax-increment financing subsidies to the project as long as Fresenius Kabi spends at least $80 million on the expansion, said village attorney James Vasselli, a partner at Berwyn-based Del Galdo Law Group. The village also is subsidizing the company's water usage, and Cook County is providing a 12-year property tax reduction, Vasselli said.

Fresenius Kabi is also getting state tax credits. The estimated value of the credits could not immediately be determined . A spokeswoman for the Illinois Department of Commerce and Economic Opportunity did not respond to requests for comment.

"We are creating a state-of-the-art pharmaceutical manufacturing campus that will be a showcase for our company and the production of injectable generic medicines," Steven Nowicki, Fresenius Kabi's senior vice president of global operations for North America, said in the statement.