DEPARTMENT OF COMMERCE
Foreign-Trade Zones Board
Foreign-Trade Zone 35--Philadelphia, PA, Application for Subzone, Merck
Pharmaceutical Plant, West Point, PA
Tuesday, July 20, 1993
An application has been submitted to the Foreign-Trade Zones Board
(the Board) by the Philadelphia Regional Port Authority, grantee of FTZ 35,
requesting special-purpose subzone status for the pharmaceutical
manufacturing facility of Merck & Co., Inc. (Merck), in West Point,
Pennsylvania, adjacent to the Philadelphia 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 July 1, 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 West Point plant (387 acres, 4.2 mil. sq. ft., 83 bldgs.) is
located at Sunneytown Pike and Broad Street, in the town of West Point,
Montgomery County, Pennsylvania, some 15 miles northwest of Philadelphia.
The company is currently expanding the plant (609,000 sq. ft.) to include a
biological production facility. The West Point site is Merck's largest U.S.
research and manufacturing facility, and also the headquarters for its U.S.
Human Health Division.
The facility (5,000 employees) is used to produce a wide range of patented
prescription and over-the-counter pharmaceutical products. The finished
products include "Pepcid" ulcer treatment; "Noroxin" antibiotic; "Sinemet"
medication for the treatment of Parkinson's disease, and "Dolobid" anti-
inflammatory analgesic. A veterinary product is also produced at the plant.
Company officials are considering the production of osteoporosis, glaucoma,
and oncology medications at the West Point facility. Currently,
foreign-sourced materials account for, on average, 12 percent of the
finished product value and include the following specific chemicals:
Diflunisal, famotidine, norfloxacin, and levodopa. The company may purchase
products from abroad in the following general product categories: gums,
starches, waxes, vegetable extracts, 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
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%, most dutiable at 6.3%). The duty rates on
foreign-sourced items range from duty-free to 23.5%, with most falling in
the 6.9%-13.5% range. 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 September 20, 1993.
Rebuttal comments in response to material submitted during the foregoing
period may be submitted during the subsequent 15-day period
(October 4, 1993).
A copy of the application and accompanying exhibits will be available for
public inspection at each of the following locations:
Office of the District Director,
U.S. Department of Commerce, Suite 202,
475 Allendale Road,
King of Prussia, Pennsylvania 19406.
Office of the Executive Secretary,
Foreign-Trade Zones Board,
U.S. Department of Commerce, Room 3716,
14th & Pennsylvania Avenue, NW.,
Washington, DC 20230.
Dated: July 2, 1993.
John J. Da Ponte, Jr.,
(FR Doc. 93-17178 Filed 7-19-93; 8:45 am)