Merck’s New Virginia Plant
Merck has launched a new $3 billion plant on its large manufacturing campus in Elkton, Virginia. In its announcement Monday, the investment is under the plan implemented by the New Jersey company to spend over $70 billion in manufacturing, research, and capital projects in the U.S.
The proposed 400,000-square-foot plant will complement the presence of Merck on its huge property at the base of the Blue Ridge Mountains in the Shenandoah Valley in Virginia. The complex is already 1.2 million square feet, including over 1,000 employees.
The new plant will assist in the production and testing of small-molecule production and testing as the investment is active across the pharmaceutical ingredient and drug product functions, Merck said. The plant is what the company has referred to as its Center of Excellence in small-molecule manufacturing, and is capable of producing over 500 full-time jobs, according to the company.
“It’s an important milestone. It’s important for Merck. It’s important for Virginia. It matters to manufacturing in the United States,” Rob Davis, the CEO of Merck, said during a groundbreaking event.
A History of Growth
The history of Merck in Elkton can be traced back to the 1940s, when the plant manufactured vitamins for soldiers in World War II. A three-year-old expansion project there took the company to a cost and added 120,000 square feet and 150 employment opportunities to enhance production of its HPV vaccine Gardasil.
This is not the only U.S.-based project that Merck has already unveiled this year at a high price. The company started a 470,000-square-foot, $1 billion biologics manufacturing plant in Wilmington, Delaware, in April. In May, its animal health division announced that it would invest in growing production capacity at its plant in De Soto, Kansas to the tune of $895 million. In early 2008, Merck finished a 225,000 square-foot, $1 billion dollar vaccine facility in their Durham, North Carolina complex.
Industry-Wide Investment in the U.S.
Merck is not an exception and is joining numerous other biopharmaceutical firms that have announced their intentions to invest in the U.S this year. Also, it is the third recent announcement of the company’s construction of a large facility in Virginia.
Eli Lilly announced last month that it had settled on a location close to the state capital of Richmond, where it would construct a $5 billion plant to manufacture active pharmaceutical ingredients. AstraZeneca recently (under two weeks ago) cut ground on a manufacturing plant in Albemarle County, near the University of Virginia, worth about $4.5 billion.
In a release, Youngkin said that a transformational investment of $3 billion by Merck to place its Center of Excellence in America and Virginia is a big step in the right direction towards the life sciences industry in America and Virginia. It enhances the long-term focus on innovation at the company and enables the Commonwealth to become the new national leader in the biopharmaceutical, advanced manufacturing, and life sciences.
Other firms that have announced significant investment plans in the U.S. in recent months are Roche, in which the firm has promised to spend $50 billion, and the Johnson and Johnson firm in which the firm has announced a $55 billion project that will involve strengthening its medtech business. Sanofi and Novartis have, in the meantime, pledged to invest at least $20 billion in the U.S. each by the close of the decade, part of the investment commitments in the U.S. made by many other pharmaceutical companies.
The planned investments are expected when President Donald Trump has threatened to impose taxes on drugs imported into the U.S. There is still a lot of uncertainty regarding the impact of the possible tariffs, but last month, Trump indicated that he planned to impose a 100 percent tax on imported pharmaceuticals, excluding companies that are constructing manufacturing plants in the U.S.
