Import Administration
FTZ Staff Contact Information
last update: September 2002 
                           (Cite as: 58 FR 47858)


                           DEPARTMENT OF COMMERCE

                               (Docket 49-93)

   Foreign-Trade Zone 61--San Juan, Puerto Rico; Application for Subzone,
 Plant, (Pharmaceutical and Agricultural Chemical Products) Barceloneta, PR

                         Monday, September 13, 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 and agricultural chemical product manufacturing 
facility of Merck, Sharp & Dohme Qui1mica de Puerto Rico, Inc. (MSD), a 
wholly-owned subsidiary of Merck & Co., Inc. (Merck), in Barceloneta, 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 30, 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.)

MSD's Barceloneta plant (221 acres, 440,616 sq. ft., 76 bldgs.) is located
at RD 2, Km. 57, 30 miles west of San Juan, in the municipality of
Barceloneta, Puerto Rico. The facility (850 employees) is used to produce
pharmaceutical bulk chemicals and intermediates used in Merck's human and
animal health products, and finished animal health and agricultural
chemical products for its AgVet (agricultural/veterinary) Division. Bulk
pharmaceutical and intermediate products currently include amiloride HCl,
enalapril maleate, lisinopril and methyldopa, used in the treatment of high
blood pressure; cyclobenzaprine, a muscle relaxant; ivermectin bulk, a
livestock anti-parasitic; and timolol free base and timolol maleate, for
the treatment of glaucoma. These active ingredients are sent to Merck's
other facilities for processing into final products. Finished animal
health/agricultural chemical products currently include "Avid", an
antiparasitic for crop protection, "Curatrim", treatment for liver flake in
cattle, "Heartgard Plus", for prevention of canine heartworm disease, and
"L-AAN", used in the treatment of hypertension. 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.

Currently, foreign-sourced materials account for, on average, 40 percent of
the value of the products that leave the Barceloneta plant including the
following specific chemicals: amiloride HCl crude, avermectin B sub1 ,
trienone, clorsulon, keto ester, ala-pro, pyrantel, DMSO, vanillin, TFA LYS
PRO free base, formamide, S-glycolamine, and DCT. The company also may
purchase products from abroad 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. The company may also source
abroad insecticides, rodenticides, fungicides and herbicides for use in its
AgVet production.

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%, most falling in the 3.7%-13.5% range). The duty rates
on foreign- sourced items range from duty-free to 23.5 percent, with most
falling in 3.7%- 13.5% range. The application indicates that the savings
from zone procedures will help improve the firm's international

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 November 12, 1993.
Rebuttal comments in response to material submitted during the foregoing
period may be submitted during the subsequent 15-day period to November 29,

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, room G-55, 
Federal Building,
Chardon Avenue, 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: September 2, 1993.

John J. Da Ponte, Jr.,

Executive Secretary.

(FR Doc. 93-22317 Filed 9-10-93; 8:45 am)