Week of April 22, 2002
  Project Watch
Federal Express Memphis hub
Memphis's expertise in air-cargo distribution was one reason why Greystone Medical Group chose to consolidate manufacturing in the West Tennessee city. Federal Express is headquartered in Memphis, where the company maintains a major hub operation (pictured) in the city.
Biotech Player Greystone Consolidating Manufacturing
in Memphis

MEMPHIS, Tenn. — Every now and again, some seemingly obscure, not-so-large deal ultimately turns out to be the start of something big. (How many of us, for example, really knew where Redmond, Wash., was way back when?)
        That, possibly, could turn out to be the case with biotech concern Greystone Medical Group, which has just announced that it will consolidate its manufacturing operations in Memphis, Tenn. The consolidation will involve a modest 25 jobs in 7,800 sq. ft. (702 sq. m.) of leased space in Memphis, already home to the company's nine-employee headquarters.
        It's obviously an important deal for Greystone. But in the larger scheme of things, it seems a relatively ordinary transaction. And, fact is, time may demonstrate that that was exactly what it was.
        There were, on the other hand, some contrary signs. One of them was Gov. Don Sundquist, who was conspicuously front and center at the press conference announcing Greystone's consolidation.
        Then there was the size of the crowd at the press conference at St. Jude Children's Research Hospital. Some 200 medical and business leaders were on hand - granted, some of them attending the jointly held Tennessee Biomedical Engineering Conference and the Tennessee Biotechnology Assn. Regional Conference.
        What was driving all this seemingly incongruous hoopla? Greystone's cutting-edge product line - particularly Accelerex, a time-release treatment for healing chronic wounds like burns, pressure ulcers and foot injuries. While that market may sound obscure, it's substantial. Chronic wound treatment is a US$10 billion a year business.
        Accelerex has drawn rave reviews from some physicians during European trials. Ninety-five percent of patients who participated in trials in Holland, for example, reported positive results, according to the Dutch Burn Research Foundation and the Netherlands Red Cross Burns Foundation. Many of the participants in the Dutch trials were patients for whom all other treatments had failed.

Distribution: All the Way from Memphis
Distribution speed is an obvious imperative for a product like Accelerex.
        Accordingly, Memphis's widely recognized expertise in air-cargo distribution was one of the reasons Greystone chose the Tennessee city, company CEO Greg Pilant explained at the press conference.
        Greystone also liked the support the company found in Memphis, he added.
        "We see a real biotechnology center here that is growing, that has a lot of resources," Pilant said. "The success of our industry depends in large part on the support and commitment of government, research facilities and educational institutions, and we have found that support and commitment in Tennessee."
        "This region is determined to be a leader in biotechnology," Sundquist said. "The new Memphis Biotech Foundation, with the support of my friend Pitt Hyde (chairman of the Memphis Biotech Foundation) and many others, has created unique business opportunities for biotech companies here."
        In addition to moving Accelerex manufacturing to Memphis, Greystone is shifting its Thermo-Tec production to the West Tennessee city. The company's Thermo-Tec products provide constant temperatures over sustained time periods. The U.S. Army and Air Force, for example, use Thermo-Tec vests and seats to keep their helicopter pilots warm.
        Memphis's gains come with losses elsewhere. Consolidating Accelerex and Thermo-Tec manufacturing in Tennessee will mean closing Greystone's existing plants in Florida and South Carolina, Pilant said.

Configuring Space to Accommodate Alternative Futures
The Memphis manufacturing consolidation comes at a pivotal time for Greystone Medical Group. The company is readying to seek approval for Accelerex from the U.S. Food and Drug Administration. The request may come as early as mid-July, Pilant said.
        The company is configuring its Memphis space for maximal flexibility, reflecting Greystone's divergent alternative futures. Greystone's space will begin its corporate life as a manufacturing plant, Pilant explained. The Memphis manufacturing space is being fitted out, however, to accommodate a rapid turnaround into research lab space, he added.
        That scenario could mirror the larger future for Greystone's entire operations. A large pharmaceutical company could well come on board and decide that it, not Greystone, should manufacture all of the ingredients in Accelerex. Should that be the case, Greystone's Memphis manufacturing operation will have to quickly be transformed into R&D-friendly space.
        Whether that happens remains to be seen. Greystone's niche is a perilous one in which the leading edge can become the bleeding edge.
        The company is one of the few firms that have maintained a high-profile presence in the difficult, failure-plagued field of wound-healing products. Many other firms - some exponentially larger - have abandoned the area. Johnson & Johnson, for example, last year junked Regranax, its wound-healing offering, after the company had spent $30 million on research.

Winalta Picks Indiana for First U.S. Plant, Which Will Employ 250
Winalta President and CEO Sapara
"The strong Hoosier work ethic" was one reason why Winalta picked the Linton site, said President and CEO Sapara (pictured).

LINTON, Ind. — After considering other sites in Kentucky, Ohio and Tennessee, home manufacturer Winalta has decided to make south central Indiana the home of its first U.S. plant. The announcement means 257 new jobs for Linton, Ind. , a city of some 5,800 residents that's felt the forceful undertow of the economic downturn.
        "We are thrilled to make this announcement and to bring these jobs to Greene County," said Lt. Governor Joe Kernan, who leads the state's economic development efforts. "This area has been hit especially hard by the national recession, so this facility and these new jobs are very good news."
        "God knows we need this shot in the arm," said Linton Mayor Jimmie Wright at the project announcement at the Old Bank and Co. restaurant in Linton. "This is an outstanding day for Linton and all of Greene County."
        Wright presented keys to the city to Michael Lawson and James Sapara, co-owners of Winalta, which is headquartered in Edmonton, Alberta, Canada.

Labor Sealed Deal
Winalta will set up its first U.S. plant inside a vacant building that once housed a Sunbeam plant. The company has bought the facility for an undisclosed price. Winalta will invest $4.9 million in renovating and retrofitting the building, company officials said.
        The Linton facility will produce 600 to 1,000 modular and manufactured homes per year. At full capacity, the plant will be capable of building up to four units per day. Marketed under the Ridgewood, Westalta and Carlton brand names, the Linton operation's output will be marketed throughout the U.S. Midwest.
        Labor was the deal-maker for Winalta, company officials said.
        "The work force here is just incredible," Lawson said. "I just couldn't believe what was available here."
        "We are proud of this venture in Indiana and are excited to be in this new market," said Sapara, who serves as Winalta's president and CEO. "Our homes have the reputation for quality and durability, and we know that, combined with the strong Hoosier work ethic, our products will just get better."

Incentives Include Federal Funds
The Winalta project also qualified for a number of incentives, state and local officials explained.
        The Indiana Dept. of Commerce (DEC) is providing up to $1.1 million in EDGE (Economic Development for a Growing Economy) tax credits, plus another $145,000 from the Skills Enhancement Fund to help defray employee training costs. In addition, Greene County is providing a 10-year real property tax abatement of up to $421,775 and a personal property abatement of $82,887.
        The state DEC is also offering Linton a $2-million low-interest industrial development loan. The loan comes from the federal Dept. of Housing and Urban Development's (HUD) Community Development Block Grant program. The HUD grant can be used for buying land, equipment and other real property. In order to qualify for the loan, however, Winalta must agree to make 102 of its jobs available to residents with low and moderate incomes.
        "This is a new, innovative way to use these federal dollars towards creating Hoosier jobs," said Kernan. "As the state budget shrinks and our ability to assist projects like these is further restricted, relying on federal dollars is something that we will have to do if we want to compete."

The Denver area (pictured) is the technological epicenter of Colorado, recently ranked as the No. 3 U.S. state for high-tech growth by The Milken Institute's New Economy Index. Photo courtesy of Denver Metro Convention & Visitors Bureau.

Briefly . . . Quick Takes

WESTMINSTER, Colo. — While high tech as a whole may be struggling, high-tech workers are still in demand in the Denver area. That was part of the rationale for DeVry University's decision to build a new 72,000-sq.-ft. (6,480-sq.-m.) campus facility in Westminster in suburban Denver.
        The greater Denver area is the technological epicenter of Colorado, recently ranked as the No. 3 U.S. state for high-tech growth by The Milken Institute's New Economy Index.
        "We're pleased to have DeVry University locate its new campus here in Westminster," said Westminster City Manager Brent McFall. "We hear consistently from local employers that one of their greatest challenges is filling skilled positions. Having DeVry here will be a great benefit both to Westminster and other regional businesses who are seeking a well-educated technology work force."
        The single-story facility, which will include computers, computer labs and a technical library, will be able to accommodate as many as 3,000 students, said Timothy Campagna, president of DeVry University's Colorado campuses.
        The expansion decision was triggered by the Higher Learning Commission's approval of the academic merger of DeVry Institutes and Keller Graduate School of Management. The two will meld into a single regional institution under the DeVry University name.
        Denver-based Prime West and Chicago-based ORIX Real Estate Equities will jointly develop the new DeVry University campus. DeVry has signed a 15-year lease, valued at $19 million, on the Westminster property.


©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.