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Generic Pharmaceuticals Producer Creates Nearly 300 Jobs with SBA 504 Loan Program
DORADO, PR -- A couple of years ago, Kentucky-based BLU Pharmaceuticals’ president William ‘Bill’ Luster was on the lookout for a new solid dosage facility to manufacture generic pharmaceutical products as part of his company’s growth strategy.
Blu Pharmaceuticals, a certified minority-owned firm, focuses on the manufacturing and distribution of high quality generic pharmaceuticals at competitive prices.
Luster’s search for new business opportunities resulted in the purchasing of a 145,000 square foot production plant in Dorado, Puerto Rico that became available when generic pharmaceuticals firm Biovail decided to transfer its manufacturing operations to Steinbach, Canada, leaving hundreds of people unemployed.
“When I started looking at purchasing or building a manufacturing plant I looked in several areas of the mainland and internationally, such as New York, New Jersey, and Argentina and Brazil,” said Blu Caribe President Bill Luster. “When I considered building, I was going to build in Kentucky, but where is the talent in Kentucky in pharmaceutical manufacturing? I found Dorado through a facility locator. Candidly, I thought Puerto Rico would not be a choice because big pharma was the strong hold and felt the facilities would be too big and too expensive for our needs.”
Luster went on to explain that, as it turned out, purchasing the Dorado facilities was not out of reach financially, and that the company also looked at the tax incentives provided by the Puerto Rico Industrial Development Company (PRIDCO).
“Those [tax incentives] are well published,” Luster said. “Those incentives are not ultimately what influenced our decision. Ultimately, the reason we chose Puerto Rico is simple to me, Puerto Ricans are passionate about manufacturing pharmaceuticals. In fact, I believe no one can do it better.”
In order to help finance the $10 million project, Luster obtained a $3.6 million loan under the U.S. Small Business Administration’s 504 Certified Development Company loan program, which provides long-term fixed financing to purchase land, machinery and equipment and for business expansion. Designed to promote economic development in the community by creating jobs, a 504 loan originates through a CDC – a non-profit corporation that invests in its community’s economic development and helps generate jobs—together with a bank.
BLU Caribe’s loan was provided with the support of certified development company PYMES Financial Partners Corporation and third-party lender Banco de Desarrollo Económico para Puerto Rico (Economic Development Bank for Puerto Rico).
"The SBA’s 504 loan program is one of the agency’s best resources for job creation and economic development,” said SBA District Director José R. Sifontes. “BLU Caribe is the first pharmaceutical factory to open in Puerto Rico since 2007, and we are thrilled that the company has taken advantage of this program to foster job creation in an industry that has seen its share of difficulty on the island in the past few years.”
BLU Caribe began operations in April 2010, by re-hiring close to 100 of Biovail’s former employees and producing the first batches of the generic antibiotic ciprofloxacin for the U.S. market. Currently, the plant is producing three additional generic pharmaceuticals.
Since opening day, BLU Caribe has grown to 280 employees and plans to continue hiring. The company had sales of $17 million in 2010 and expects to close 2011 with more than double that amount. The plant also expects to have produced two billion tablets during its first year of operations, and plans to further increase annual production capacity to around four billion tablets by 2013.
BLU Caribe General Manager Sandra Rodríguez-Toledo, one of only three women in Puerto Rico leading a pharmaceutical company said “we have all put in many long hours, including weekends, to make the company what it is today.”
Luster attributes the company’s success to the high-caliber personnel with many years of combined pharmaceutical manufacturing experience. Currently the manufacturing activities have increased to double the capacity when manufacturing activities started last January. BLU Caribe operates 24 hours a day, seven days a week.
For more information on SBA programs and services, visit www.sba.gov/pr.