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                           (Cite as: 58 FR 44492)



                             (Docket No. 39-93)

Foreign-Trade Zone 61--San Juan, Puerto Rico, Application for Subzone Merck
          Sharp & Dohme Pharmaceutical Plant, Arecibo, Puerto Rico

                          Monday, August 23, 1993

An application has been submitted to the Foreign-Trade Zones Board (the 
Board) by the Commercial and Farm Credit and Development Corporation of 
Puerto Rico, grantee of FTZ 61, requesting special-purpose subzone status 
for the pharmaceutical manufacturing facility of Merck Sharp & Dohme 
Quimica de Puerto Rico, Inc. (MSD), a wholly-owned subsidiary of Merck & 
Co., Inc. (Merck), in Arecibo, Puerto Rico, adjacent to the San Juan Customs 
port of entry area. The application was submitted pursuant to the provisions
of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the 
regulations of the Board (15 CFR part 400). It was formally filed on August 
9, 1993.

Merck is one of the world's largest pharmaceutical manufacturers with
nearly $9 billion in total sales in 1991. Its primary product lines
include: patented prescription and over-the-counter pharmaceutical
products, veterinary pharmaceuticals and agricultural and specialty
chemicals. This proposal is part of an overall company cost reduction
effort. (Applications for subzone status are also being submitted for seven 
other Merck facilities.)

Merck's MSD plant in Arecibo (18 acres, 150,000 sq. ft., 3 bldgs.) is
located at Km. 60 on Road PR-2, in the municipality of Arecibo, Puerto Rico, 
some 35 miles west of San Juan.

The facility (currently 80 employees, 225 at full production) was recently
purchased from A.H. Robbins and is currently under renovation. The
principal product manufactured will be "Proscar", a treatment for prostate 
enlargement, and its intermediates. "Prilosec" (anti-ulcer preparation),
"Vasotec" (ACE inhibitor for hypertension), and "Mevacor" and "Zocor"
(cholesterol lowering agents) also may be produced at the plant. Finished
products are then shipped to Merck's West Point, Pennsylvania, facility 
(application pending FTZ Board approval, FTZ Doc. 29-93, 58 FR 38749, 
7/20/93) for U.S. distribution.

At the outset, the production of "Proscar" would account for a substantial
portion of the savings from zone procedures. Its main active ingredient,
finasteride, is foreign-sourced and constitutes between 5 and 15 percent of
the finished product's value. The company also may purchase from abroad
active ingredients for other Merck products (listed above) and items in the
following general product categories: gums, starches, waxes, vegetable
extracts, mineral oils, phosphoric acid, hydroxides, hydrazine and
hydroxylamine, chlorides, phosphates, carbonates, hydrocarbons, alcohols,
phenols, ethers, epoxides, acetals, aldehydes, ketone function compounds,
mono- and polycarboxylic acids, phosphoric esters, amine-, carboxymide,
nitrile- and oxygen-function compounds, heterocyclic compounds,
sulfonamides, vitamins, hormones, sugars, antibiotics, gelatins, enzymes,
color lakes, soaps and detergents, medicaments, and pharmaceutical products.

Zone procedures would exempt MSD from Customs duty payments on foreign
materials used in production for export. On domestic sales, the company
would be able to choose the duty rates that apply to the finished products
(duty-free to 23.5%). The duty rates on foreign-sourced items range from
duty-free to 23.5 percent. For example, "Proscar" is dutiable at 6.3
percent, while its active ingredient, finasteride, has a duty rate of 7.9
percent. The application indicates that the savings from zone procedures
will help improve the firm's international competitiveness.

In accordance with the Board's regulations, a member of the FTZ Staff has
been designated examiner to investigate the application and report to the 

Public comment is invited from interested parties. Submissions (original
and 3 copies) shall be addressed to the Board's Executive Secretary at the
address below. The closing period for their receipt is (60 days from date
of publication). Rebuttal comments in response to material submitted during
the foregoing period may be submitted during the subsequent 15-day period 
November 8, 1993.
A copy of the application and accompanying exhibits will be available for
public inspection at each of the following locations:
U.S. Department of Commerce District Office, 
Federal Building, Room G-55,
Chardon Avenue, Hato Rey, 
San Juan, Puerto Rico 00918

Office of the Executive Secretary, 
Foreign-Trade Zones Board, 
U.S. Department of Commerce, Room 3716,
14th & Pennsylvania Avenue, NW, 
Washington, DC 20230.

Dated: August 10, 1993.

John J. DaPonte, Jr.,

Executive Secretary.

(FR Doc. 93-20317 Filed 8-20-93; 8:45 am)