Smithfield Herald

September 7, 2013

Novo Nordisk to expand Clayton plant

Pharmaceutical company Novo Nordisk will invest $102 million to expand its Clayton plant, creating 110 new jobs.

Novo Nordisk will spend $102 million to expand its plant near Clayton, creating 110 jobs, mostly in production.

The company, based in Denmark, came to Johnston County in 1996. Its plant here employs 550 people who make products that treat diabetes.

Company executives announced the expansion at Monday’s county commissioners meeting. Lars Eriksen, project director, thanked commissioners for working with the company; the county will give Novo an estimated $2.6 million in incentives to expand in Johnston.

“We’d like to continue our expansion in this area, especially for the Clayton site, mainly due to this collaboration we’ve had,” Eriksen said.

He added that the high quality of the local workforce was also a factor in the company’s decision to expand here.

In the first six months of 2013, the North American market made up almost half of Novo’s sales and about 70 percent of the company’s growth, according to the company.

“Expansion will make it possible for this site to continue delivering all we need for the United States market for the next hopefully many years,” he said.

The $102 million expansion will take place over the next three years, Eriksen said. The company will add onto its building on Powhatan Road and buy more equipment to increase production.

“By doing that, we’ll be expanding a number of jobs that we have running all these different types of production equipment and maintaining the site and maintaining all these new buildings as well,” he said.

Novo could have expanded production or built a new plant elsewhere. Ericksen said the county’s incentives helped sell the company on Clayton.

Essentially, the county will return $2.6 million taxes to Novo Nordisk, said Peggy Anderson, the county’s interim director of economic development.

The county will return two types of taxes. The first is the property tax on the new building. For the first five years, the county will return 90 percent of the property tax on the building. In year six, the rebate will fall to 80 percent. In year seven, it will drop to 70 percent and then end.

The county will also return the property taxes on the new equipment – half of the taxes in the first five years.

Anderson said Novo’s investment in its Johnston plant is important for the county. “Having them expand in the county shows that they have confidence in the county; they know that they can get the labor force that they need,” she said. “It ultimately is going to mean a lot more on our tax books. I know that we’re giving them grants right now, but ultimately we will see something there.”

Anderson said Novo also pays an average salary higher than the county’s. The county average salary is $33,070, while Novo’s average is $58,719.

As county commissioners moved to approve the economic incentives, multiple commissioners seconded the motion. “Everyone will second that,” said Jeff Carver, the board’s chairman.

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