Cambrex makes $50 million Charles City expansion project official

By Bob Steenson, bsteenson@charlescitypress.com

Cambrex has announced a $50 million manufacturing expansion project at its Charles City plant, the sixth major investment the company has made at the site in the past eight years.

The likelihood of the project has been known for several months, since the company applied for state and city incentives in July to help finance the expansion. But the announcement from Cambrex company headquarters in New Jersey on Tuesday makes it official and provides more details.

The expansion, which is expected to be operational in early 2022, will add three large-scale manufacturing work centers and one mid-scale work center to the Charles City facility’s 45-acre site, increasing the capacity by 30 percent, the company announced.

With the expansion, the Charles City site will employ more than 400 people.

“Small molecule manufacturing demand has been growing consistently over recent years, and this investment will enable Cambrex to continue to capitalize on this growth, further strengthening our position as a market-leading CDMO,” said Joe Nettleton, president of Cambrex’s Drug Substance Business Unit.

A CDMO is a contract development and manufacturing organization, meaning it provides services and manufacturing to other companies in the pharmaceutical industry on a contract basis.

Nettleton is a Charles City resident and the former site director of the Charles City facility.

He added, “This expansion in the U.S. for API manufacturing capacity comes at a time when our customers increasingly require high-quality partners to ensure reliable supply chains within the pharmaceutical sector.”

In July, the Iowa Economic Development Authority Board approved $250,000 in direct financial assistance as well as tax benefits to help what was then described as a $49.3 million project.

In addition to $250,000 in direct assistance in the form of a five-year forgivable loan, the state will make available an estimated $244,275 in state sales, service and use tax refund and research activities credit through the state’s High Quality Jobs program.

The Charles City Area Development Corp. approved at its July meeting a $30,400 forgivable loan as part of the local match required for the state funds. That was based on the promise of at least 32 new jobs.

In October, the Charles City Council approved $40,000 in a forgivable loan from the city, also as part of the required local match.

The council also approved a state incentive of a 90% property tax abatement for nine years on the increased value of the property caused by the expansion project, for an estimated value of about $720,000.

Cambrex will provide more than $48 million of the project financing itself.

Previous Cambrex Charles City projects, in 2012, 2015 and 2017 have seen total capital investment of almost $100 million that have created more than 100 new jobs, according to information from the Iowa Economic Development Authority.

In 2019, Cambrex was acquired by funds advised by Permira, a global investment firm, to continue to build upon Cambrex’s market leading position in active pharmaceutical ingredient (API) development and manufacturing and support the growth of its integrated service offering across the pharmaceutical value chain, the company said.