Athenex company officials said they are already hiring workers, the day after Gov. Andrew M. Cuomo announced the state will build the company a $200 million drug manufacturing plant in the Town of Dunkirk.
The first hires are quality control workers temporarily assigned to the company’s headquarters in Buffalo, said Flint D. Besecker, chief operating officer of Athenex. The company also is recruiting engineers.
Work to prepare the Dunkirk site for the 300,000-square-foot, state-of-the-art facility could begin as soon as April, with construction completed by the end of 2018, Besecker said.
On Thursday, Cuomo formally announced the state’s plans to invest $225 million in sites in Dunkirk and Buffalo for a project that would create 1,400 jobs — half hired by Athenex and half hired by suppliers. Besecker on Friday offered new details on how the partnership with the state came together and how the high-profile economic-development initiative will proceed in the coming years.
The highlights include:
• Besecker, CEO Johnson Y.N. Lau and other Athenex officials looked all over Western New York and the Southern Tier for a suitable site for the drug-manufacturing plant, Besecker said.
The governor’s office wanted to build a plant for Athenex outside Buffalo and Erie County to bring the benefits of an economic-development project of this size to an outlying region, he said.
“That was their request to us,” Besecker said, and the company agreed. Cuomo and other elected officials touted the value of the project to Chautauqua County at Thursday’s announcement.
The company, for its part, sought a site that was within half-a-day’s drive of Buffalo, he said.
The location in the Town of Dunkirk, on Lake Shore Drive East, also was attractive to Athenex officials because it is a greenfield site that doesn’t require extensive environmental cleanup and because of the well-developed utility network in the area, Besecker said. The plant will use an “enormous” amount of power, he said, and close access to sufficient energy from the grid was a key determination in their site selection.
“It just demonstrates how critical infrastructure is to our communities,” Chautauqua County Executive Vincent W. Horrigan said in an interview.
The company is likely to seek low-cost power allocations through the New York Power Authority, though it hasn’t yet taken that formal step, Besecker said.
• Site preparation work for the Dunkirk plant could begin this spring, pending approval by the State Legislature of the $200 million included by Cuomo in his state budget proposal. The state is building and equipping the drug-making plant, while Athenex will spend at least $1.52 billion over 10 years on labor, supplies, materials, utilities and other operating costs.
There is a lot of engineering work that still needs to be done to design a plant of this complexity. “It’s a very technology-driven plant,” Besecker said.
Once construction begins, it should be completed in 18 to 24 months, by the end of 2018. While hiring has begun for the Dunkirk plant, it will take five years from the opening of the facility to reach full employment, as production lines come online. The plant will make advanced cancer drugs and pharmaceutical products that will be shipped all over the world.
“The strategy is you bring up different parts of the plant over time,” Besecker said. Each production line has to receive U.S. Food and Drug Administration validation before it can go into use.
In addition to 450 plant workers, suppliers and related companies will hire another 450 workers, and Athenex will use its leverage to convince suppliers to co-locate in the Dunkirk area, Besecker said.
With that longer time frame to ramp up hiring, Athenex will work with local officials and schools to identify and retrain workers in the area for jobs at the plant, he said.
• In addition to the Dunkirk site, the state also is spending $25 million on a headquarters, product development center and pilot plant for Athenex in the Conventus medical research and office building on the Buffalo Niagara Medical Campus.
The company, which had 45 employees in Conventus at the end of 2015, has promised to hire 250 more workers there, with suppliers hiring another 250. Athenex has five years to meet its 250-job figure at Conventus, but expects to do so within three to four years, Besecker said.
• Athenex’s partnership with the state does include a third location.
Athenex is eyeing an expansion at its QuaDPharma site in Newstead, which has seen its workforce soar since Athenex acquired the company in September 2014 and is running out of room there. Athenex plans to triple QuaDPharma’s space, but the company hasn’t decided whether to do so at QuaDPharma’s existing location or at a new site, Besecker said. However, any move would be within Erie County, Besecker said. The 250 Conventus workers include those who would be added as part of the QuaDPharma expansion.
QuaDPharma will manufacture pharmaceutical lotions and creams for Athenex and on contract for other companies, Besecker said.