Novartis Vaccine Manufacturing Facility, North Carolina, USA

In July 2006 Novartis announced that it would build a new vaccine manufacturing facility in Holly Springs, North Carolina, USA. The new 300,000ft² plant is expected to employ approximately 350 personnel from the local area to produce flu vaccines using new technologies.

The facility is being constructed on a 167-acre site in Holly Springs Business Park off the NC 55 Bypass. Construction started in the first quarter of 2007 with the first phase scheduled for completion by the final quarter of 2008. The plant is expected to be validated by 2011–2012 and operational by 2013. The initial investment is estimated at $267m but could eventually reach $600m with subsequent phases of expansion.

COMPETITION AND INCENTIVES

Several states competed for the manufacturing facility, with its promise of hundreds of jobs and millions in tax revenue. Novartis' selection of the town followed an intensive two-year effort by Holly Springs with assistance from state and county agencies.

Attracting the manufacturing facility required an incentives package that included $8.3m from Holly Springs. The Town Council approved the purchase of the 167-acre site for the facility in the business park for $7.3m from G&G Properties and transferred ownership to Novartis.

The council then approved an additional $1m spending for site clearance. Holly Springs has also received an $800,000 grant from the Golden LEAF Foundation to help fund infrastructure improvements in the business park.

In total, Novartis Vaccines and Diagnostics, a subsidiary of Novartis AG of Basel, Switzerland, will receive cash grants, land, tax credits and other incentives worth more than $41m from state and local governments. The town property taxes that Novartis will pay on the first phase of construction are expected to enable Holly Springs to recoup its investment within ten years. The total investment of approximately $600m by Novartis includes a $220m grant from the US Department of Health and Human Services in June 2006.

HOLLY SPRINGS SITE EVALUATION

Securing the project has been the culmination of five years of economic development groundwork by the town council to make Holly Springs attractive to the growing biotech industry. Dr Joerg Reinhardt, CEO of Novartis Vaccines & Diagnostics division, said: "The company evaluated more than 15 sites across the United States before choosing Holly Springs."

He cited factors including availability of infrastructure, a well-trained and educated workforce, and quality of life. He concluded: "All of these aspects, at the end of the day, gave the highest scores to North Carolina and Holly Springs." The town hired Jennings Consulting to help market the 400-acre business park for technology manufacturing companies and this helped in the attraction of Novartis.

INFRASTRUCTURE IMPROVEMENT

Extension of infrastructure was a key part of the process. In 1996 Holly Springs began studying how best to pipe water from Harnett County to supplement the flow from Raleigh.

Construction began in 2000 on a pipeline capable of carrying 10 million gallons a day.

The line was increased to serve large-scale manufacturing operations such as Novartis while accommodating residential growth.

With improved capacity, the town is arranging to pipe more water through the line.

NOVARTIS FLU VACCINE PRODUCTION

The Novartis facility in Holly Springs will be the first manufacturing plant in the US to produce cell culture-derived flu vaccines. New flu cell culture vaccine manufacturing technology promises many advantages over traditional egg-based production, including greater reliability and a reduction in production time.

Once completed and approved for commercial production the facility is expected to annually produce up to 50 million doses of seasonal trivalent flu vaccines, which will be for use in the US.

In the event of an influenza pandemic, the facility has planned to have a capacity of up to 150 million monovalent doses annually within six months of a pandemic declaration. Novartis is also making investments in its site in Marburg, Germany, to expand capacity for flu cell culture vaccines production in Europe.

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