GlaxoSmithKline ($GSK) has decided to build a £350 million ($463 million) plant in Ulverston, U.K., but to also invest another £230 million ($304 million) at the other three sites the company was considering, a Solomon-like decision for the British-based company.
The new manufacturing plant in Ulverston, in Cumbria, is the first new manufacturing facility for GSK in the U.K. in nearly 40 years and is highly anticipated.
Four existing GSK sites in the U.K. were given consideration: Barnard Castle and Ulverston in the North of England, and Irvine and Montrose in Scotland. GSK said it will invest £150 million ($198 million) in the sites in Scotland and about £80 million ($106 million) in Barnard and in Ware. It expects to add 1,000 new positions over the lifetime of the projects.
CEO Sir Andrew Witty credited a new tax break in the U.K. with helping it make the decision. "The introduction of the patent box has transformed the way in which we view the U.K. 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," he said in a statement.
Beginning in 2013, the country will cut to 10% the corporate tax rate on profits from products invented in the U.K., something that manufacturers are likely to point to as taxes and user fees are discussed in the U.S.
Plant construction is expected to begin in 2014 or 2015 and take about 6 years to complete. The company said it is considering additional investments in Ulverston which could double its investment to £700 million ($925 million) depending on the investment climate.
GSK, the world's largest vaccine company, said additions in Montrose will allow for the manufacture of aluminum adjuvants for its vaccines. It also also will allow it to make materials for its respiratory drugs. Improvement in Irvine will increase production capacity for antibiotics. The company said the investments at both sites will include "sustainable green energy production and environmentally friendly manufacturing technologies."
The £80 million being spent at its sites in Ware in Hertfordshire will add to manufacturing capacity for its next-generation respiratory inhalation device and at Barnard Castle in County Durham to establish a dermatology manufacturing center of excellence.
About 6,000 of its 15,000 employees in the U.K., are currently in manufacturing. The Ulverston plant, which makes ingredients for antibiotics, currently employs about 240.
- read the GSK announcement