GlaxoSmithKline (GSK) Consumer Healthcare, one of the world’s largest pharmaceutical companies, has announced that it will transfer its current manufacturing operations from Carlisle, Penn. to Guayama, Puerto Rico, to consolidate volumes and maximize cost efficiencies.
Jennifer Albano, U.S. Brand Communications Lead for GSK Consumer Healthcare, said to THE WEEKLY JOURNAL that the company “will take a phased approach to move production to Guayama over the next two years.
“We are also making a capital investment in Guayama and creating additional jobs there to support the increased volume,” the GSK spokeswoman added.
Per THE WEEKLY JOURNAL’s request, Albano explained that the move is expected to create an estimated 150 production jobs in Puerto Rico.
GlaxoSmithKline uses the Carlisle, Penn. site to make Emergen-C, a powdered drink mix, vitamin C supplement. Based on the company’s decision, which impacts approximately 260 employees, production will be phased out of Carlisle by mid-2021, with a full exit planned by the end of 2021.
GlaxoSmithKline is involved in the research, development and manufacturing of pharmaceutical medicines, vaccines and consumer healthcare products. Locally, the British company also has a manufacturing site in Humacao.
Manuel Laboy, secretary of the Department of Economic Development and Commerce (DDEC, by its Spanish acronym), welcomed the relocation of GSK manufacturing operations to Puerto Rico.
“We appreciate GSK’s confidence in Puerto Rican talent and resources. We continue working to ensure that more companies reaffirm their commitment to the island in this way. This expansion is excellent news for our professionals and the southern region of Puerto Rico because of the economic benefits it will represent. Our staff will continue to work as a team, together with the company, in search of the best opportunities in favor of the people,” Laboy responded to this media outlet in a written statement.
A source revealed to THE WEEKLY JOURNAL that the company’s decision to relocate its manufacturing operations to Puerto Rico was made without engaging in conversations with local government officials. GSK representatives and DDEC officials are supposed to meet this week.
Sources also revealed that GSK has not received any tax benefits.
While the federal government has provided tax incentives to companies in Puerto Rico since 1921, tax-exemption policies became the main engine of growth after World War II, when the economic development strategy known as “Operation Bootstrap” began.
Once a growing manufacturing hub, Puerto Rico’s manufacturing industry experienced a decline in the mid-2000s after federal tax incentives for businesses that produced goods on the island were phased out, prompting several companies and tens of thousands of their workers to leave.
Until the mid-2000s, Section 936 of the Internal Revenue Code gave mainland United States companies an exemption from federal taxes on income earned in Puerto Rico, whether it came from operations or interest on local bank deposits.