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Arrow plant in Malta to expand

215 staff to grow 10-20%

Watson Pharmaceuticals, the California-headquartered drug giant which acquired the Arrow Group in December, is to expand Arrow's Malta plant following the planned closure of a manufacturing and research facility in Canada, Charlie Mayr, senior vice-president, corporate affairs, told The Sunday Times.

The staff complement is expected to be increased by 10 to 20 per cent, Mr Mayr said.

Malta Enterprise chairman Alan Camilleri confirmed the government agency was involved in discussions to extend the Ħal Far plant, Arrow's largest in terms of capacity worldwide.

According to international press reports, the move out of Toronto will save the holding company up to $20 million a year. Some production facilities will also be transferred to Goa, India, where output is expected to be doubled to six billion tablets a year.

"After an extensive analysis of how to best balance Watson's expanded global production capabilities, following the completion of the Arrow acquisition, senior management determined that production currently conducted at the Canadian facility can be carried out at other existing facilities with excess capacity and more favourable production costs, including Malta and India," Mr Mayr said. "With the closing of the Canadian facility planned for late 2011, a number of products will be transferred to Malta."

The Malta plant is part of Arrow Group's pharmaceutical supply chain, which also includes manufacturing facilities in Canada and Brazil, and biopharmaceutical production capabilities in the UK.

On acquisition of the Arrow Group last year, all the capacity of the Arrow facilities was incorporated into the Watson Global manufacturing and supply chain network, which includes facilities in Florida, California and Utah in the US, and India and Ireland.

In Malta, Mr Mayr explained, Watson will be increasing current capacity of existing technology. It will also increase production volume to support new product launches, and the geographic expansion of its existing portfolio, as well as to incorporate production transferred from Canada.

Production increases will take place this year, and are expected to continue over the next two to three years as more volume is transferred to the facility, Mr Mayr added.

He would not be drawn on the anticipated investment in the facility, or the specifics about the expansion of the technologies or capabilities of the Malta facility. However, he said that to accommodate the increased workload at the facility, Watson intends to increase staff by approximately 10 to 20 per cent.

There are 215 full-time employees at the Ħal Far plant, almost all of whom are Maltese. Part-time and casual workers, University and Mcast students and apprentices completing their training with Arrow, bring the overall number to 250.

Asked about the Malta plant's contribution to Arrow's and Watson's wider business, Mr Mayr explained: "The facility is a significant and growing component of Watson's global pharmaceutical supply chain. Watson will continue to invest and grow the capabilities of the Malta plant to support currently marketed products, as well as products in the company's pipeline."

The Malta facility manufactures immediate release, solid dosage form products. It provides a number of benefits to Watson, Mr Mayr pointed out, particularly those related to Malta's EU membership, a qualified and highly skilled workforce, lower operating costs compared to other US and EU locations, and a lower corporate tax rate.

In terms of regulation, the Malta facility is approved for the US Food and Drug Administration and Europe, the Middle East and Africa. Products produced in Malta are marketed in Europe, the US, Canada, Australia, New Zealand, South Africa and Brazil.

Privately-held Arrow International registered in Malta in 1999 as a fully integrated pharmaceutical group with activities ranging from research and development to sales. As one of the 500 fastest growing companies in Europe, it has just over 1,000 staff at eight plants and 40 companies in 24 countries.

Arrow started operations in Malta in 2003 with three employees and began exports in December of that year. Now considered among Malta's leading pharmaceutical companies, it has reached a capacity of 1.5 billion doses.

In its 2009 corporate review, Watson said it had made substantial progress in bringing the two companies together since December. It had completed the financial integration, conducted country-by-country business reviews, assessed the combined development portfolio, and had set in place strategic plans for expanding market reach. It was also working to take the successful results from its Global Supply Chain Initiative and apply them to its newly acquired international operations.

Watson's group turnover rose by 28 per cent to $857 million in the first quarter of the year. Watson's core business is the development and distribution of generic pharmaceuticals and specialised branded pharmaceutical products focused on urology and women's health.

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