Import Administration
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last update: September 2002 

[Federal Register: May 31, 1994]


[Docket 21-94]

Foreign-Trade Zone 49--Newark and Elizabeth, NJ; Application for
Subzone Merck & Co. Pharmaceutical Plant, Rahway, NJ

    An application has been submitted to the Foreign-Trade Zones Board
(the Board) by the Port Authority of New York and New Jersey, grantee
of FTZ 49, requesting special-purpose subzone status for the
pharmaceutical manufacturing facility of Merck & Co., Inc., (Merck) in
Rahway, New Jersey, adjacent to the Perth Amboy 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
May 20, 1994.
    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 have been
submitted for seven other Merck facilities.)
    Merck's Rahway plant (200 acres, 154 bldgs., 2,500,000 sq. ft.) is
located at 126 Lincoln Avenue (Rahway), in the cities of Rahway and
Linden (Union County), New Jersey, some 10 miles south of Newark. The
facility (3,100 employees) is used primarily to produce bulk
pharmaceutical chemicals and intermediates, but will also produce
finished pharmaceutical products. Bulk pharmaceutical chemicals are
shipped to other Merck pharmaceutical plants for further manufacturing,
packaging and distribution.
    The production of ``Primaxin'', a broad spectrum antibiotic; and
the bulk pharmaceutical chemicals, amitriptyline and cyproheptadine,
would account for a substantial portion of the savings from zone
procedures. Currently, foreign-sourced materials account for, on
average, 20 percent of its finished product value and include the
following specific ingredients: acetoxy azetidinone, HP-20 resin
dianon, SP-207 (brominated polystyrene resin), D-carboxamide, dienone,
trienone, 1-Methyl-4 hydroxypiperdine. The company also may purchase
from abroad active ingredients for other Merck products 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. The company may source from
abroad insecticides, rodenticides, fungicides and herbicides for use in
its AgVet production.
    Zone procedures would exempt Merck 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%, with most ranging from 3.7%-
8.2%). The duty rates on foreign-sourced items range from duty-free to
23.5%, with most falling between 3.9% and 16.2% plus 3.7 cents/kg. 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 Board.
    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
August 1, 1994. Rebuttal comments in response to material submitted
during the foregoing period may be submitted during the subsequent 15-
day period (to August 15, 1994.)
    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 3718, Federal Office
Building, 26 Federal Plaza, New York, NY 10278.
Office of the Executive Secretary, Foreign-Trade Zones Board, U.S.
Department of Commerce, Room 3716, 14th & Pennsylvania Avenue, NW.,
Washington, DC 20230.

    Dated: May 20, 1994.
Dennis Puccinelli,
Acting Executive Secretary.
[FR Doc. 94-13200 Filed 5-27-94; 8:45 am]