Novo building huge warehouse to support production expansion

Novo Nordisk ($NVO) last week announced a huge manufacturing expansion, in which it will invest $2 billion to build its first plant in the U.S. as well as another facility in Denmark. Now it has a warehouse project in the works so it will have someplace to store all of the ingredients it will need for the production in its home country.

The drugmaker said today it will invest 500 million Danish kroner ($75 million) to build a 19,000-square-meter (204,524-square-foot) warehouse in Hillerød, Denmark. It will handle all inbound raw materials for Novo Nordisk's production in Denmark and will have a capacity of around 17,000 pallets, the drugmaker said. The company didn't indicate whether the project would add jobs. Instead, 70 of the 1,900 employees already working at the massive Hillerød site will move to the new facility.

"The investment in Hillerød underpins our long-term plans to invest in Denmark," Susanne Hundsbæk-Pedersen, Novo's senior VP of devices & supply chain management, said in a release. "Hillerød is a strategic site in Novo Nordisk and we're consolidating our inbound flow of materials at this site."

The Hillerød site already has a lot going on. It is 1.65 million square meters total of which about 90,000 square meters is for production and R&D facilities. It includes the company's R&D operations for devices, a components molding and preassembly facility, one for fill and finish of diabetes products and one that makes APIs for its hemophilia products.

Work on the warehouse got underway Thursday and is slated to be complete by the end of 2017. On that schedule, it will be up and running ahead of a new plant that Novo said last week it will build in Måløv, for tableting and packaging of semaglutide, a new once-a-day oral Type 2 diabetes treatment that it has under development, as well as other future oral products.

The $800 million investment in Måløv is part of the $2 billion production investment that Novo announced last week, with the key piece of that being its first API plant in the U.S. It will build the $1.2 billion facility at its site in Clayton, NC, and add 700 jobs there when it is done. Both plants are slated to be ready for production in 2020.

- read the release