UPDATED: Teva puts brakes on $300M Philly warehouse
A $300 million warehouse project in Philadelphia has been stopped dead in its tracks by Teva Pharmaceutical Industries ($TEVA) CEO Jeremy Levin's decision that the company can save big bucks by remaking its manufacturing footprint.
Levin recently laid out a 5-year plan to diversify the company's products and to save up to $2 billion in large part by making its manufacturing operations more efficient. In light of the evaluation, a spokesperson said in an emailed statement, "As such, we have made the decision to cease development plans for the proposed distribution center on Red Lion Road in Philadelphia. At this time we cannot elaborate further about plans for this property."
The 1.1 million-square-foot project was to be spread across three buildings on the site and include a warehouse, distribution facility and information technology center that would employ about 200 Teva workers and create hundreds of new jobs, according to The Philadelphia Inquirer. According to an earlier story, the project was awarded a $2.5 million state development grant.
At a meeting with investors last week, Teva's president of global operations said the company would move the "center of gravity" for manufacturing from Western to Eastern countries. He said that by reducing excess capacity and concentrating production in larger, more efficient plants, the company can save $175 million.
The company expects to shave costs to a larger degree by remaking its manufacturing footprint. It expects to save about $700 million a year by using its own ingredient plants, centralizing purchasing and locking in longer-term supply deals.
- read The Philadelphia Inquirer's story