SubscribeNo U.S. state is losing more traditional manufacturing jobs than North Carolina, as its furniture, textile and tobacco companies go overseas for cheaper labor. Manufacturing employment in the state has plunged by 140,000 workers in the last three years.
Unable to control the global market forces that are draining these jobs from the state, North Carolina is instead tapping into a new wellspring of job creation: biomanufacturing. While no one industry can replace the tens of thousands of jobs being lost in furniture, textiles and tobacco, North Carolina is betting on biomanufacturing for partial compensation.
Six factors make biomanufacturing a compelling opportunity for helping rejuvenate North Carolina’s economy:
- As more biological products come to market, the biomanufacturing industry is growing.
- Worldwide production capacity isn’t keeping up with demand, creating a need for new biomanufacturing plants.
- Biomanufacturing jobs pay higher wages than do traditional manufacturing jobs.
- For every biomanufacturing job created, an estimated three supporting jobs are created.
- North Carolina already has a large concentration of biomanufacturing companies and the infrastructure to sustain them, giving it a competitive advantage over other states in attracting and supporting these companies.
- Unlike biotechnology research and development jobs, which tend to cluster around universities in urban areas, biomanufacturing jobs can be located in rural areas, where traditional manufacturing jobs are in steep decline.
Seizing the Opportunity
North Carolina has made the recruitment, retention and expansion of biomanufacturing plants a high priority for economic development in biotechnology. Biomanufacturing takes center stage in a new statewide biotechnology strategic plan commissioned by Governor Mike Easley and developed by the state-supported, non-profit North Carolina Biotechnology Center. The plan offers several recommendations for stepping up company recruitment, strengthening work force training, and providing creative financing for new plant construction.
Even before the ink was dry on the strategic plan, the state had made four major commitments to biomanufacturing that collectively made waves in the national and international biotechnology communities.
In August 2003, the state committed $60 million for a statewide biomanufacturing training network to prepare workers for technical employment in bioprocessing. The program will address training across all the relevant scientific, technical and engineering disciplines at all levels from Certificate or Associate Degree to Ph.D. Funding for it came from the non-profit Golden Long-term Economic Advancement Foundation (Golden LEAF), which underwrites economic development activities using half of the state’s tobacco settlement money from cigarette manufacturers. In addition, the North Carolina Biosciences Organization (NCBIO), a statewide industry trade association, pledged up to $4.5 million in in-kind contributions of equipment, professional services and other resources from its member companies to support the training program.
“We’re determined that North Carolina will have the world’s best-trained workforce for biomanufacturing,” said Dr. Leslie Alexandre, president and CEO of the North Carolina Biotechnology Center. The Biotechnology Center surveyed the state’s biomanufacturing companies to assess their employment needs, and pulled together the state’s community colleges, universities and biotechnology companies in partnership to push the training initiative forward.
Of the $64.5 million pledged, North Carolina State University in Raleigh will receive $36 million to build and equip a central biomanufacturing facility to train workers. Plans call for a 91,000-square-foot plant that will provide hands-on experience in a commercial-scale, Good Manufacturing Practices (GMP) environment that simulates an industrial setting. North Carolina Central University in Durham will receive $19.1 million to establish relevant graduate and undergraduate degree programs. And the North Carolina Community College System will receive $9.4 million to recruit and train workers in local communities and serve as a feeder system to the programs at the two universities.
“North Carolina will gain a critical competitive advantage in attracting new biomanufacturing companies to our state,” said Molly Corbett Broad, president of the 16-campus University of North Carolina.
H. Martin Lancaster, president of the North Carolina Community College System, said the $9.4 million awarded to the system would fund training for more than 65 percent of the state’s future biotechnology workers. “Many of these people in mostly rural parts of North Carolina have depended on tobacco or the tobacco industry for their livelihood and are in critical need of new opportunities,” he said. “This funding and the training community colleges will provide will give them that opportunity."
On the heels of the training initiative, a second major state commitment to biomanufacturing was made in December 2003. The state’s General Assembly, meeting in a one-day special session called by the Governor, created a Life Sciences Revenue Bond Authority. The Authority will study ways to attract biomanufacturing companies to the state and recommend specific incentive packages for them.
Dr. Charles Hamner, president of NCBIO, the statewide industry trade association, has advocated such a bond authority so construction costs of new biomanufacturing plants can be shared with banks and insurance companies. Qualified companies would receive loans that would not affect the state’s credit rating, would be backed with mortgage insurance, and would have debt service reserve.
“By creating this bond authority, North Carolina will compete to be the number one biomanufacturing state in the world,” Hamner said.
A third commitment to biomanufacturing came in the same legislative session when lawmakers voted to provide up to $36.8 million in incentives and tax breaks for drugmaker Merck & Co.’s new vaccine plant in Durham, North Carolina. The package includes $24 million to acquire and develop 256 acres in Treyburn Corporate Park, plus $12.8 million in various incentives, including $4.8 million from a rebate on state sales taxes on building materials and equipment. The sales tax rebate also would go to other pharmaceutical and biotechnology companies that invest at least $100 million and employ at least 100 new workers in the state.
New Jersey-based Merck has said it would invest up to $300 million to build a facility initially employing up to 200 workers in the manufacture of vaccines for measles, mumps and rubella. Merck plans to have the plant operating in 2008.
A fourth commitment to biomanufacturing came in April 2003, when KBI BioPharma, received a $1 million loan from the North Carolina Biotechnology Center to help it start a contract drug manufacturing business in Durham. KBI is a spin-out company of Kinetic Biosystems Inc. of Atlanta, a company formed to commercialize new bioreactor technology developed by Dr. Heath Herman, a professor at the Georgia Institute of Technology.
“We are choosing North Carolina over six other states because of its supporting infrastructure for the biosciences, including the Biotechnology Center, excellent research universities and community colleges, specialized construction and engineering companies, available workers, and extensive workforce training programs, in addition to its high quality of life,” said Anthony Laughrey, president and CEO of KBI BioPharma. “None of the other six measured up when all of these factors were considered.”
KBI has located on a 74-acre industrial campus once used by Mitsubishi to manufacture semiconductors. At its peak in the 1990s, the Mitsubishi plant employed more than 500 people, the same number KBI hopes to employ by 2007.
The KBI and Merck plants give North Carolina 15 biomanufacturing companies employing about 4,700 workers in the production of therapeutic proteins, vaccines, amino acids, enzymes, foods, vitamins, nucleic acids and other biological products. Almost all of those plants have expanded recently, or plan to expand.
Among the two larger ones are Akzo Nobel’s Diosynth RTP and Biogen IDEC, both of which were recruited to North Carolina in the mid-1990s. Diosynth, with about 600 employees in Research Triangle Park, is one of the world’s largest contract manufacturers of recombinant drugs and was instrumental in convincing the U.S. Food and Drug Administration that multiple products could be produced in one plant without fear of cross contamination. Biogen IDEC, with more than 400 employees in Research Triangle Park, operates one of the world’s largest cell-culture facilities. It manufactures the multiple sclerosis drug Avonex® and the psoriasis drug Amevive®. Together, Diosynth and Biogen IDEC have created about 1,000 new jobs for North Carolinians, and both continue to expand.
Other biomanufacturing plants with established operations in North Carolina are also expanding. An estimated 2 million square feet of plant space is either operating or under construction in the state, and another 1 million square feet is planned. Companies with recent expansions include Wyeth Vaccines, which operates a large vaccine facility in Sanford, N.C.; Bayer, which operates the world’s largest blood fractionation plant in Clayton, N.C.; and Biolex, an entrepreneurial company that is pioneering the use of Lemna, a common green plant, as a production system for recombinant proteins.
Strong Infrastructure
Companies large and small have established and expanded their biomanufacturing operations in North Carolina because the state has a strong infrastructure to support this specialized and complex industry. Those resources include:
- Major research universities with world-class life science research programs, including Duke University, East Carolina University, North Carolina State University, the University of North Carolina, and Wake Forest University. These institutions conduct more than $1.5 billion in sponsored research each year, the bulk of it in the life sciences.
- The state-sponsored North Carolina Biotechnology Center, a development initiative dedicated to strengthening biotechnology research, business, education and workforce training in the state.
- The world’s largest concentration of contract research organizations (CROs) and testing companies. More than 75 of these companies employ 16,000 people who are devoted to moving biotechnology products from the laboratory to the marketplace. Major international players include Cardinal Health Care, Inveresk Research, Laboratory Corporation of America, Parexel International, PPD, Quintiles Transnational, and Research Triangle Institute.
- A growing community of specialized service companies that design, build, equip, validate and maintain biomanufacturing facilities. CRB Consulting Engineers of Raleigh, for instance, has grown from 3 employees in 1994 to about 120 today. Suitt Construction Co., a construction management firm, has more than doubled in size to 60 employees since it opened an office in Raleigh, N.C., in 1995.
- A 58-campus Community College System and a 16-campus University of North Carolina System that prepare graduates for jobs in biotechnology and biomanufacturing.
In addition to these assets, North Carolina also has the geographic advantage of being strategically located on the mid-Atlantic coast within one-day’s drive of a majority of the U.S. population. This makes distribution of products more efficient and cost-effective, and allows European executives to visit their biomanufacturing sites faster and cheaper than sites on the U.S. West Coast.
Workforce Training Critical
Job growth in biomanufacturing has averaged about 10 percent a year in North Carolina since 1990, and that trend is expected to continue. The greatest challenge in ensuring continued growth is having a prepared workforce to operate biomanufacturing plants. Strong workforce training programs are paramount.
In addition to the new $64.5 million training initiative described previously, the North Carolina Biotechnology Center has established a partnership with the North Carolina Community College System to develop a BioWork course for training entry level bioprocess technicians in bioprocess, pharmaceutical, and chemical manufacturing. This 128-hour course covers basic science, cGMP, and manufacturing technology, giving students the background they need to learn quickly and effectively on the job. The course is offered to the public, but also is used by companies for in-house training of new hires or incumbent workers.
The Biotechnology Center and the community colleges also sponsor an annual BioQuality workshop series on cGMP as well as other business and communications topics offered by nationally recognized training organizations such as the GMP Institute of the International Society of Pharmaceutical Engineers and Kepner-Tregoe of Princeton, N.J. Workshops are available at a nominal cost to employees of North Carolina pharmaceutical manufacturing companies.
Networking and Learning Opportunities
Access to informal collaborating and networking opportunities plays an important role in North Carolina’s biomanufacturing industry. The state has a large and dynamic chapter of the International Society of Pharmaceutical Engineers. The North Carolina Biotechnology Center also sponsors a new Bioprocessing and Process Development Focus Group that provides a dedicated forum for process development scientists and engineers in the state to discuss issues, challenges and developments in biomanufacturing.