Chicago companies rebuild in Puerto Rico after Hurricane Maria – Manufacturing News

on Sep27

27 September 2017 | 10:30 am

CORRECTED

Chicago companies with island outposts are scrambling to rebuild and restart operations after Hurricane Maria’s disastrous impact on Puerto Rico.

At least seven Chicago area companies—Abbott Laboratories, AbbVie, Leica Microsystems, Hill-Rom, Takeda Pharmaceuticals, Fresenius Kabi USA and Sagent Pharmaceuticals—nearly all in the pharmaceutical or medical device manufacturing industries, are struggling to rebuild after the damage.

Power is still out across most of the island after the hurricane flooded electricity-generating plants last Wednesday.

“Puerto Rico is a big spot for a lot of drug development because of some of the tax incentives,” said Damien Conover, Chicago-based director of health care equity research for Morningstar. “When there’s a natural disaster there’s going to be some repercussions.”

Hill-Rom, a Chicago-based medical equipment manufacturer, operates one facility in eastern Las Piedras, P.R., where it makes Bard Parker products. Spokesman Howard Karesh said products produced in Las Piedras account for $60 million, or about 2 percent, of Hill-Rom’s annual revenue. The plant sustained minor structural damage, a temporary loss of power and minimal water damage. Karesh said he anticipates Hill-Rom Puerto Rico will be fully up and running again in the next few weeks.

“Our top priorities right now are ensuring the safety and security of our 170 colleagues and their families,” he said in an email to Crain’s.

RESTORING ELECTRICITY

Karesh did not comment on whether there would be any financial loss or product shortage because of the hurricane. German drugmaker Fresenius Kabi USA, with North American headquarters in Lake Zurich, also did not comment on whether the hurricane would impact its financial or operational performance.

Fresenius has two manufacturing plants in Puerto Rico, one in southwest San German and one in western Maricao.

“We employ about 1,000 people in Puerto Rico and they remain our primary concern,” said spokesman Matt Kuhn in an email to Crain’s. “Nearly all are safe and accounted for, though we are still waiting to hear from a few.”

Fresenius has been working with local company leadership to ship food, water, money and other supplies to island employees and their families. The company said its plants were largely undamaged by the hurricane.

Fresenius restored operation in San German on Monday, on a reduced schedule. Officials from the local power company have been on the site to try and restore its electricity, Kuhn said.

He said it may take longer to restore electricity at the Maricao facility because it’s more remote. The company expects to resume operations in Maricao next week, pending employee availability and access to diesel fuel. Fresenius also plans to eventually donate to the American Red Cross and AmeriCares.

“It’s like normal phone calls you have with these organizations, it’s taking weeks to get a response because they are so busy with all business everywhere,” Kuhn said of AmeriCares. He expects Fresenius will donate anti-infectives and anti-fungals to the health relief and development agency. “We just don’t know what they need yet,” he said.

MANUFACTURING SITES

Takeda Pharmaceuticals, a Japanese drugmaker with U.S. headquarters in Deerfield, said the company has donated at least $20,000 to the Red Cross. The company does not have any Takeda-owned or operated plants or warehouses on the island. But there are five Takeda sales employees in Puerto Rico. The company said it has checked in with all of them to confirm their safety and well-being.

“We’re continuing to assist our employees with their efforts to recover from the hurricane,” Jim Schwartz said in an email to Crain’s, although he did not comment how the company was assisting workers. “Authorities on Puerto Rico have indicated recovery efforts are underway to restore power.”

Other companies include Abbott, which operates at least one 333,000-square-foot-manufacturing plant in northern Puerto Rico; Abbvie, which also operates one manufacturing facility on the north part of the island; Buffalo Grove-based Leica Microsystems, which has four local addresses listed for the island; and Schaumburg-based Sagent Pharmaceuticals, which has a regional business manager there. None commented on the damage to their facilities or employee well-being.

But Charles “Tony” Butler, managing director and senior biopharmaceutical analyst at Guggenheim Securities, said he will be surprised if the hurricane has any impact on AbbVie and other companies’ financial performance.

“None of these companies have announced or pre-announced, “We’re going to miss numbers or products from Puerto Rico,'” he said.

Butler said if there were a financial impact, it would be seen in the fourth quarter of 2016 or first quarter next year. But “this is why redundancies exist,” he said. “A company which is sustainable doesn’t need to rely on that one factory, realizing that a fire could happen or a hurricane or 100 other things. There are other manufacturing sites that are able to manufacture whatever the product is.”

Fresenius Kabi’s North American headquarters city has been corrected.



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