Covidien unveils $100m expansion plans

By Gareth Macdonald

- Last updated on GMT

Related tags Investment

Covidien hopes that a $100m (€74m) expansion of facilities at its production hub in St Louis, Missouri, US will boost efficiency and cut the time it takes to bring products to market.

The firm, which is headquartered in Bermuda, will invest in its R&D centre in Webster Groves creating around 30 new jobs and increasing capacity at its Maryland Heights manufacturing facility, according to a St Louis Business Journal​ report.

Covidien explained that around $72m would be spent at the 364,000 square foot Maryland Heights plant to add a further 12,000 feet of manufacturing space. Construction is scheduled to begin early next year and is anticipated take around five years to complete.

The investment move is in keeping with comments made by Covidien in late September when it announced a wide ranging restructuring programme through which hopes to generate savings of between $50m to $75m a year.

Commenting at the time, company CEO Richard Meelia said that: “we remain committed to making incremental investments in R&D to strengthen our portfolio and expand into adjacent high-growth areas of the healthcare market​.”

Prior to today’s news, Covidien announced the opening of a €15m expansion at its​Blanchardstown plant in Dublin. The development, which increases production capacity by 30 per cent, will create 13 new manufacturing jobs and bring the total workforce to 103 employees.

Ramps up radiopharma capacity

One key aspect of the Maryland Heights investment plan is the addition of 5,000 square feet to its radiopharmaceuticals manufacturing capacity to improve standards and expand the supply of products to its medical imaging division.

Earlier this year the US Food and Drug Administration (FDA) issued Covidien with a warning letter following the identification of several manufacturing problems at the Maryland Heights facility.

An agency inspection in March uncovered violations related to the production of Covidien’s Ultra-TechneKow DTE Generator, specifically that the firm had failed to establish appropriate standards and test procedures.

Speaking to Reuters earlier this year Covidien spokeswoman Joanna Schooler said that: “we are obviously treating this FDA warning letter very seriously and we are committed to working closely with the FDA to resolve their concerns​.”

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