Perrigo Research and Development, a wholly owned subsidiary of the Perrigo Company, will construct a new $1.2 million building to house an analytical lab and expand its current facility, and will spend another $400,000 on furniture, fixtures and equipment for it. The lab will develop new products for the pharmaceutical and nutritional markets.
The building will go up on the firm’s campus near one of its manufacturing plants along Eastern Avenue.
Construction began today, May 20, and should finish by the end of the year. Dan Vos Construction Co. of Ada is directing the project, which was designed by Kraus & Kessenich of Grand Rapids. The expansion will add about 6,400 square feet to the research facility.
Perrigo Manager of Investor Relations and Communications Ernie Schenk told the Business Journal that the city of Allegan approved the project’s site plan last week.
Perrigo had considered putting up a lab in Greenville, S.C., where it has a manufacturing plant, or in Allegan, where Perrigo has its headquarters. Allegan won out because the Michigan Economic Development Corp., the state’s economic development agency, offered Perrigo a high-technology Single Business Tax credit worth up to $395,000 over 10 years.
“Perrigo is an important part of Michigan’s Life Sciences Corridor, and it is encouraging to see the company continue to grow. This new research and development laboratory will enhance Perrigo’s industry leadership while providing new jobs for West Michigan families,” said Gov. John Engler.
In addition to the state tax credit, the city of Allegan gave Perrigo a local tax abatement worth $241,900 over 12 years. Perrigo Executive Vice President Mark Olesnavage said the firm appreciated the efforts of the state and the city to keep the lab in West Michigan.
“The expansion of our analytical laboratory facility supports our quality and new product development initiatives, efforts that further secure our commitment to pharmaceutical excellence,” he said.
Perrigo is the nation’s top maker of non-prescription drugs and nutritional products sold in supermarkets, drug stores and mass merchandisers under their labels. A few of the firm’s business partners include Rite-Aid, Target, CVS and Walgreen’s.
The University of Michigan said that Perrigo will create 31 new jobs from the project, a number that includes 25 new scientific positions within the company. The school estimated that average wage of those jobs will be $865 per week, and the personal income generated over the life of the tax credits is expected to top $20.4 million.
Schenk said some of the scientists would be on board at Perrigo before the building is finished.
“I’m not sure that we will get all 25 hired immediately but I think we will have some new people ready to go when the building is done,” he said.
U-M also estimated that the project should result in total net revenue to the state of $1.2 million during the next decade.
Perrigo was founded in 1887, has sales of more than $720 million annually, and makes more than 400 products in 10 categories that account for over 30 billion tablets each year.