Bayer AG To Embark On $100 Million Expansion; New Jobs

Published: Jun 12, 2006

The medical diagnostics division of German pharmaceutical conglomerate Bayer AG is planning a $100 million expansion of its East Walpole facility -- growth that will add at least 70 jobs to the 700 the company already employs here.

"Our business is growing and demand for our products are growing, and we're pretty much at or near capacity," said Bayer HealthCare spokeswoman Linda Langendonk. "We need to expand, and we're happy about that."

Bayer HealthCare's diagnostics arm manufactures reagents used in diagnostic tests for cancer, heart disease and other aliments. Plans call for adding approximately 116,000 square feet of manufacturing, warehouse and storage space to the 400,000-square-foot East Walpole facility, which already employs about 500 people. Another 200 employees are based at two separate facilities in Norwood that encompass a combined 139,000 square feet.

Groundbreaking is tentatively slated for July, Langendonk said, depending on getting permits and tax incentives in order first. Bayer expects East Walpole planning officials to sign off on its expansion project soon, and local conservation officials must also approve the project. Bayer is still negotiating with state officials regarding tax and other economic incentives.

Rod Jané, executive director of the Massachusetts Office of Business Development, said his office has negotiated with Bayer on topics including real estate tax exemptions.

Bayer's focus on expanding in Massachusetts reflects well on efforts to grow life science and medical device industries here, said Thomas Sommer, president of the Massachusetts Medical Device Industry Council.

"It's terrific news," he said. "It's evidence that device companies are looking to expand in Massachusetts rather than to relocate in other regions. It shows you that our stature and rank among life sciences companies remains significant and prominent."

Bayer HealthCare's expansion plan follows on the heels of the announcement by Bristol-Myers Squibb Co. that it will build a 750,000-square-foot manufacturing facility in Devens that will employ more than 500 people.

Life sciences growth is rapidly under way in other areas, too, as Charles River Laboratories International Inc. in Wilmington (NYSE: CRL) continues construction of a state-of-the-art facility in Shrewsbury that will house 800 jobs. Natick's Boston Scientific Corp. (NYSE: BSX) has long-range expansion plans in Marlborough, where it has moved 500 jobs. Another 1,000 employees will be added to the Marlborough facility over the next several years, Jané said, thanks in part to real estate tax exemptions approved by the Marlborough City Council and a 5 percent investment tax incentive credit from the state.

Bayer HealthCare has sizable financial backing behind it. It is an enormous, profitable subsidiary of Bayer AG (NYSE: BAY) that generated more than $1.7 billion in net cash flow in fiscal 2005. Net sales during the fiscal year surpassed $12 billion, a 17 percent jump over fiscal 2004. The subsidiary is a large one, including animal health, consumer care, diabetes care, diagnostics and pharmaceuticals divisions. Bayer AG employs more than 93,000 people worldwide.

The Tarrytown, N.Y.-based HealthCare division has had a presence in East Walpole since 1998, when it bought the facility from the vaccine company Chiron Corp., said Mike Canary, Bayer's program manager for the $100 million expansion. Its employee base includes a mix of highly technical jobs such as research scientists, organic chemists, biologists, biochemists and some semi-skilled labor that handles distribution and packing of materials.

The East Walpole site has housed manufacturing of some kind for 26 years through various owners, according to Bruce Gordon, president and CEO of Columbia Construction Company in North Reading. Columbia has served as construction manager for various projects on the site throughout its history, including recent renovation projects and the expected expansion slated to begin this year.

Assuming construction starts this summer, Bayer hopes to have its expansion complete by the end of 2008.

Mark Hollmer can be reached at mhollmer@bizjournals.com.

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