L'Oréal Canada's new logistics center opened in late 2001,bringing under one roof the supply chain processes for the company's more than 9,600 different products.

Biopharma On the Ground

Everybody does have biotech and pharmaceuticals on their minds, if not in their towns. But in Québec, the core of a true biopharma cluster has been present for a long time.
        In June, growing Dutch firm DSM announced that its biologics division would locate a $7-million biopharmaceutical fermentation facility in Montréal. The new high-tech plant represents a large-scale expansion of DSM Biologics' present 70,000 sq. ft. (6,503 sq. m.) of clean room, R&D and production facilities in Montréal.
        "This proposed expansion will also be a major step forward in the realization of DSM Biologics' growth mission to become a world market leader in the contract manufacture of biopharmaceutical products," says Gerben Algra, Managing Director of DSM Biologics, "and it means a strengthening of DSM's leading position as a supplier to the pharma industry."
        Jean-Louis Burgos, senior vice president and general manager for Royal LePage Commercial, says Québec has multiple positive attributes in its favor when it comes to drug and therapy development.
        "Québec has friendly laws vis-a-vis patent protection, and also legislation allowing companies to deduct research and development," he says. "In the biotech field, there are industrial parks where clients can get tax holidays from real estate taxes. The other thing for biotech is that Montréal has five major universities, so the pool of human assets to stock these companies has always been very favorable."
        "Montréal ranks 8th among North America's leading biopharma clusters," adds Matuszewski.
        Those observations are borne out by data that show a work force of 6,000 researchers in Montréal alone, spread among 70 different R&D centers and 145 companies.
        Burgos also says that while high-tech may have cooled down somewhat, that talent base is ripe for employment by the biotech sector.
        "We're the fifteenth-largest city in North America, but we're ranked number five in high-tech employment," he says. "Biotech is similarly placed, you just have to look at the companies residing here. At Merck Frosst, every year there seems to be some kind of expansion. There's just constant growth in that particular sector in Québec."
        In June, Mallinckrodt Canada committed more than $17.8 million to expanding its Pointe-Claire manufacturing center, adding a product line and an additional 24 jobs to the current payroll of 115. Mallinckrodt Canada Vice President and Managing Director Jean-Pierre Robert said the expansion would allow better customer satisfa ction, while also increasing the company's penetration of North American markets.
        At the same time, DRAXIS Pharma President Dwight Gorham announced an investment of nearly $12.8 million in order to add a product line that will triple its contract manufacturing capacity for freeze-dried medications, adding 40 jobs in the process. Both corporate leaders voiced thanks for the support they received from Invest Québec through its Private Investment and Job Creation Promotion Fund.
        Aventis Pharma, one of the largest pharmaceutical companies in Québec with over 600 employees, will invest $12.8 million of its own in an expansion of its production capacity at its 92,893-sq.-ft. (8,630-sq.-m.) plant in Laval. And ratiopharm (known as Technilab before a buyout by the German firm) will invest some $51 million and create more than 150 jobs in expanding its facilities at Mirabel, adding an international center of excellence in R&D.
        "These R&D activities will ensure our long-term growth, and provide us with a competitive edge," says Jean-Guy Goulet, newly appointed president and CEO of ratiopharm. "One of our top motivators for continuing to invest in Québec is the excellent return on investment for R&D activities. The exceptionally attractive tax credits here are an indisputable advantage. We already have a firm presence here with our Mirabel plant, so strategically it made sense for us to build on that momentum."
        Company officials expect the increase in production capacity to help them meet the growing demand from the upcoming launch of 93 new generic drugs, including 82 in Canada and 11 in the United States. Completion is scheduled for summer 2003.
        Tangential to the health-related growth is a significant increase in beauty: L'Oréal Canada's announced $64.3-million expansion of its production and distribution facilities in Saint-Laurent, established in 1958. Production space will almost double to 256,000 sq. ft. (23,782 sq. m.), and the warehouse operation will more than double to 370,000 sq. ft. (34,373 sq. m.), with construction of the building to be completed in May 2003. More than 100 new jobs are expected to be added to the payroll of 1,200 over the next three years. Invest Québec contributed $3.5 million through its Private Investment and Job Creation Promotion Fund.
        The company is also moving its head office, currently divided between three Montréal buildings, to one location in Complexe Les Ailes, occupying nearly 90,000 sq. ft. (8,360 sq. m.) of office space at a complex that will house 310 employees, with room for further expansion.