Archive for Saturday, December 10, 2005

Celliance drops distribution site

Company moves national center to Chicago instead of Lawrence

December 10, 2005


Celliance is backing out of plans for operating its national distribution center in Lawrence, but company officials say they remain committed to an even bigger project: opening the company's idle $28 million manufacturing plant in town.

Celliance, a division of Atlanta-based Serologicals Corp., has abandoned plans to relocate its distribution base from Massachusetts to the former Davol building at 700 E. 22nd St.

The center instead is moving to the Chicago area, to operate alongside the company's biggest production plant for its biggest product, Ex-Cyte, in Kankakee, Ill.

"It's a bigger plant," said Bud Ingalls, vice president and chief financial officer for Serologicals. "It's an easier place to distribute from. That's all."

The shift comes less than three months after Serologicals and Celliance officials chose Lawrence to be its distribution clearinghouse. In late September they had reaffirmed optimism in the city becoming a major player in the bioprocessing company's future.

"Lawrence has been a great place for Celliance, so we are pleased to be expanding our presence there," Celliance president David Bellitt said at the time. "The distribution center will be an important component in our operations."

The center was to occupy about 15,000 square feet in the former Davol building, and the building's owners have been busy making upgrades - new loading dock doors and the like - to prepare for the center's projected opening sometime after Jan. 1.

The center was being designed to accommodate Ex-Cyte, a cell-growth liquid produced at the Lawrence plant, and other products making their way to customers from other company locations.

"We have done quite a bit of improvements on the site," said Joel Fritzel, a co-owner of the former Davol building, who emphasized that he and his partners still have a signed lease for a section of the building. "We've made improvements on the site, which indeed enhances their space."

As for the Lawrence plant - a $28 million project finished last year in the East Hills Business Park - Celliance still plans to have it up and running by the end of the first quarter, which would be March 31, Ingalls said.

The plant has been idle since this past March, when the company announced that it would lay off 19 of 26 employees in Lawrence. The employees no longer were needed - but were asked to consider returning at a later date - as the company blamed delays in having its major customers validate the plant's processes and products.

On Friday, Ingalls said that three of Celliance's four major customers - all "big pharma" companies - had cleared the plant for production. The fourth, he said, would complete its work by the end of March.

"We've hit no snags or any problems at this point in time," Ingalls said.

The plant has been idle since producing its first 1,650 liters of Ex-Cyte, an advance on the 110,000 liters the plant would be capable of delivering at full production.

Company officials expect the Lawrence plant's products to generate $60 million in annual sales. Ex-Cyte is a liquid used by pharmaceutical companies and other research operations to promote cell growth, considered key in the development of drugs and other products.

Ex-Cyte sales are up 10 percent so far this year, Ingalls said, and Celliance's plant in Kankakee has been running 24 hours a day, seven days a week to keep up with demand.

The Lawrence plant, he said, will be counted on to relieve the pressure. Officials already have started discussions about bringing back laid-off employees, and officials continue to believe that the plant will be running by March 31.

Even if the distribution center is operating out of Illinois.

"We're pleased," Ingalls said. "Everything's gone as expected."


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