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last update: September 2002 

[Federal Register: January 6, 1994]


Foreign-Trade Zones Board
[Docket 64-93]

Foreign-Trade Zone 24--Pittston (Wilkes-Barre/Scranton), PA;
Application for Subzone, Merck & Co. Pharmaceutical Plant, Riverside,

    An application has been submitted to the Foreign-Trade Zones Board
(the Board) by the Eastern Distribution Center, Inc., grantee of FTZ
24, requesting special-purpose subzone status for the pharmaceutical
manufacturing facility of Merck & Co., Inc., (Merck) in Riverside,
Pennsylvania. 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
December 28, 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 (subzone status is being requested for seven
other Merck facilities).

    Merck's Riverside plant (364 acres, 650,000 sq. ft., 68 bldgs.) is
located at First Street and Avenue C in Riverside (Northumberland
County), Pennsylvania, some 60 miles southwest of Scranton. The
facility (560 employees) is used to produce bulk pharmaceutical
chemicals and intermediates used at other Merck plants in the
manufacture of human and animal health products, agricultural chemicals
(including ``Avermectin'' and ``Ethopabate''), and industrial
chemicals. At the outset, zone procedures would be used primarily in
the production of ``Primaxin'', a broad spectrum antibiotic produced
for the company's Human Health Division. Currently, foreign-sourced
materials account for 33 to 43 percent of finished product value and
include the following specific ingredients: Acetoxy azetidinone, HP-20
resin dianon, SP-207 (brominated polystyrine resin),
bromochloropentane, and D-carboxamide. The company also may purchase
from abroad 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
also source from abroad insecticides, rodenticides, fungicides, and
herbicides for use in its agricultural/veterinary products. Currently,
exports account for some 40 percent of 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 (``Primaxin''--3.7%; others--duty-free to 23.5%). The
duty rates on foreign-sourced items range from duty-free to 23.5
percent, with most falling in the 3.7%-7.9% range. The application
indicates that the savings from zone procedures will help improve the
plant'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
March 7, 1994. Rebuttal comments in response to material submitted
during the foregoing period may be submitted during the subsequent 15-
day period (to March 22, 1994).
    A copy of the application and accompanying exhibits will be
available for public inspection at each of the following locations:

Port Director, U.S. Customs Service, Northeast Region, Bldg. 135, 2nd
Floor, Middletown, PA 17057.

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

    Dated: December 28, 1993.
Dennis Puccinelli,
Acting Executive Secretary.
[FR Doc. 94-282 Filed 1-5-94; 8:45 am]