Perrigo to invest $40m to expand Negev plants

Perrigo has already boosted the workforce at its two Negev plants by 40% over the past three years to 900 employees.

Perrigo Company (Nasdaq:PRGO; TASE:PRGO) will invest $40 million over three years to expand its plants in Yeruham and Ramat Hovav in the Negev. Perrigo EVP global operations and supply chain John Hendrickson made the announcement at a press conference in Yeruham today.

Hendrickson said that Perrigo's Israeli operations included both production and R&D, and were part of its core business. He cited the diligence, commitment and education of the plant's employees, and added that government incentives facilitated the company's decision to keep hundreds of employees in the Negev.

Perrigo has boosted the workforce at its two Negev plants by 40% over the past three years to 900 employees, 40% of whom have university degrees. The company has invested $280 million in the plants over the years, as well as $30 million in R&D in Israel.

Perrigo posted $3 billion (NIS 11.4 billion) revenue in 2011. Sales by its Israeli operations totaled NIS 1.6 billion in 2011, up 20% over 2010, and the company expects double-digit growth in 2012. Exports from the two plants exceeded $1 billion in 2011, and they are the company's largest development and production centers outside the US.

The Yeruham plant develops and produces a range of generic drugs, especially complex dermatology products, the original business of Agis Pharmaceuticals, which Perrigo acquired. The Ramat Hovav plant is a leading global developer and producer of active pharmaceutical ingredients (APIs) for the generic drug industry, with more than 300 customers.

Perrigo is 125 years old. It was a private company until it acquired Agis, which was traded on the TASE, for $900 million in 2005. Perrigo took the opportunity to list on Nasdaq, and become dual-listed. The company achieved 10% organic growth in the six years following the Agis acquisition, and 47% growth including acquisitions.

Hendrickson said that Perrigo was very optimistic about its growth in 2012. "Our growth opportunities are excellent in the US, which accounts for 70% of our business, as well as in other countries. We're expanding in the US and Europe, especially in pharmaceuticals, and in the functional food sector elsewhere in the world. The economic crises in the US and Europe actually help us, because they push consumers to use generic treatments," he said.

As for biosimilars, Hendrickson said, "At the moment, we're look with curiosity from the outside, and we have not yet made any substantial investment in the field. Although we won't be pioneers in the field, when it develops, we'll probably enter it quickly."

Perrigo's share price rose 0.8% by mid-afternoon on the TASE today to NIS 445.60, after rising 0.7% on Nasdaq yesterday to $115.50, giving a market cap of $10.8 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on June 21, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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