Chinese company balks on reopening Boehringer plant

Nearly 250 workers at a closed Boehringer Ingelheim API facility in Virginia that had been told they might be able to hold on to their jobs have had their hopes dashed. The Chinese company that agreed to buy and expand the facility has decided to leave it closed until business improves.

UniTao Pharmaceuticals bought the plant in Petersburg, VA, from Boehringer in October for what turns out to be $2.4 million and said it planned on investing $22.5 million with the help of $2 million in incentives from the state and city. But on Friday, the Chinese company announced it would "idle its pharmaceutical operations in Petersburg until business conditions improve."

UniTao said it will keep a small team onsite to "ensure the facility remains a viable pharmaceutical operation in the near future." About 30 employees currently work at the facility, but UniTao didn't disclose how many of those would be let go. The company said that "impacted employees will receive a severance package for their brief service to the company." The company also said it has given a heads-up to the Virginia governor's office and city officials that it wouldn't be accepting any incentives since it was unable to meet its end of the bargain. A state official told the Richmond Times Dispatch that none of the state funds had been paid yet.

City spokeswoman Jay Ell Alexander told the newspaper that company and city officials had met about the situation. She didn't disclose what had changed UniTao's timing but said, "We are confident that once the business climate turns around, they will be in full operation and able to adhere to their agreements as set forth originally."

Germany-based Boehringer Ingelheim, which has been closing plants and cutting jobs in the face of shrinking revenues, had been whittling jobs at the Virginia plant for several years. In August 2013, Boehringer targeted the Virginia plant for closure, citing its own lack of demand. Just weeks ahead of its Dec. 31, 2014, deadline for shutting it, Boehringer announced the deal with UniTao, saying the 240 workers would be able to reapply for their jobs. UniTao, a subsidiary of Shanghai-based Tenry Pharmaceutical, had pledged to grow employment there by about 135 jobs. Terms of the deal were not disclosed at the time, but the Progress Index, citing city records, said UniTao picked the plant up for the fire sale price of $2.4 million, less than 10% of its appraised value of $28.6 million.

- here's the UniTao statement
- read the Times Dispatch story
- get more from the Progress Index