GSK expanding OTC plant that had been slated for sale

Several years ago, GlaxoSmithKline ($GSK) sold off a portfolio of consumer products in the U.S. The drugmaker had indicated a plant in Memphis, TN, was going to be sacrificed as part of that decision, but GSK still has the plant and is even planning to spend some money making improvements to it.

The U.K. drugmaker in 2011 announced it intended to unload a variety of older OTC products to focus on faster-growing brands. It eventually closed a $660 million deal with Prestige Brands for 17 of the consumer drugs it sold in North America. They included products like BC, Goody's and Ecotrin brands of pain relievers, as well as other well-known names including Beano, Gaviscon and Tagamet.

The Memphis plant, which had about 250 employees, and one in Aiken, SC, with 210, were both reportedly put up for sale as a result of the slimdown. Both made products that were part of the sale. But the drugmaker never sold the two plants, although it did close one in New Jersey. GSK spokeswoman Deborah Bold said in an email only that "GSK continuously evaluates its network of manufacturing facilities to ensure it is efficient and meets the needs of the business and, ultimately, the consumers at the end of our supply chain who rely upon our products."

GSK is now planning to make $2 million in infrastructure improvements at the Memphis site, Bold said after the Commercial Appeal reported it has snagged a building permit. Work is to start this year and is expected to run through 2017, she said. Employment has actually grown to about 300 at the Memphis plant in the last several years but no new jobs are expected as a result of the project.

"Operating since 1964, the facility produces Polident denture cleaning products, also marketed as Corega outside of the U.S., and other over-the-counter products sold by GSK," Bold said.

When GSK made the decision in 2011 to sell off some of its lower-margin products, it said it intended to focus its consumer business on faster growing of wellness/OTC drugs, nutrition and oral health. Manufacturing in the oral health business had a hiccup recently when GSK started recalling nearly four million tubes of Biotene and Sensodyne toothpaste manufactured by Utah-based contractor Oratech. The voluntary recall is because some tubes were found to have wood fragments in them when the paste was extruded.

- here's the Commercial Appeal item