Foreign-Trade Zone 24-Pittston (Wilkes-Barre/Scranton), PA; Application for Subzone, Merck&Co. Pharmaceutical Plant, Riverside, PA

DEPARTMENT OF COMMERCE

Foreign-Trade Zones Board

[Docket 64-93]

Foreign-Trade Zone 24--Pittston (Wilkes-Barre/Scranton), PA;

Application for Subzone, Merck & Co. Pharmaceutical Plant, Riverside,

PA

An application has been submitted to the Foreign-Trade Zones Board

(the Board) by the Eastern Distribution Center, Inc., grantee of FTZ

24, requesting special-purpose subzone status for the pharmaceutical

manufacturing facility of Merck & Co., Inc., (Merck) in Riverside,

Pennsylvania. The application was submitted pursuant to the provisions

of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the

regulations of the Board (15 CFR part 400). It was formally filed on

December 28, 1993.

Merck is one of the world's largest pharmaceutical manufacturers

with nearly $9 billion in total sales in 1991. Its primary product

lines include: Patented prescription and over-the-counter

pharmaceutical products, veterinary pharmaceuticals, and agricultural

and specialty chemicals. This proposal is part of an overall company

cost reduction effort (subzone status is being requested for seven

other Merck facilities).

Merck's Riverside plant (364 acres, 650,000 sq. ft., 68 bldgs.) is

located at First Street and Avenue C in Riverside (Northumberland

County), Pennsylvania, some 60 miles southwest of Scranton. The

facility (560 employees) is used to produce bulk pharmaceutical

chemicals and intermediates used at other Merck plants in the

manufacture of human and animal health products, agricultural chemicals

(including ``Avermectin'' and ``Ethopabate''), and industrial

chemicals. At the outset, zone procedures would be used primarily in

the production of ``Primaxin'', a broad spectrum antibiotic produced

for the company's Human Health Division. Currently, foreign-sourced

materials account for 33 to 43 percent of finished product value and

include the following specific ingredients: Acetoxy azetidinone, HP-20

resin dianon, SP-207 (brominated polystyrine resin),

bromochloropentane, and D-carboxamide. The company also may purchase

from abroad items in the following general product categories: Gums,

starches, waxes, vegetable extracts, mineral oils, phosphoric acid,

hydroxides, hydrazine and hydroxylamine, chlorides, phosphates,

carbonates, hydrocarbons, alcohols, phenols, ethers, epoxides, acetals,

aldehydes, ketone function compounds, mono- and polycarboxylic acids,

phosphoric esters, amine-, carboxymide, nitrile- and oxygen-function

compounds, heterocyclic compounds, sulfonamides, vitamins, hormones,

sugars, antibiotics, gelatins, enzymes, color lakes, soaps and

detergents, medicaments, and pharmaceutical products. The company may

also source from abroad insecticides, rodenticides, fungicides, and

herbicides for use in its agricultural/veterinary products. Currently,

exports account for some 40 percent of production.

Zone procedures would exempt Merck from Customs duty payments on

foreign materials used in production for export. On domestic sales, the

company would be able to choose the duty rates that apply to the

finished products (``Primaxin''--3.7%; others--duty-free to 23.5%). The

duty rates on foreign-sourced items range from duty-free to 23.5

percent, with most falling in the 3.7%-7.9% range. The application

indicates that the savings from zone procedures will help improve the

plant's international competitiveness.

In accordance with the Board's regulations, a member of the FTZ

Staff has been designated examiner to investigate the application and

report to the Board.

Public comment is invited from interested parties. Submissions

(original and 3 copies) shall be addressed to the Board's Executive

Secretary at the address below. The closing period for their receipt is

March 7, 1994. Rebuttal comments in response to material submitted

during the foregoing period may be submitted during the subsequent 15-

day period (to March 22, 1994).

A copy of the application and accompanying exhibits will be

available for public inspection at each of the following locations:

Port Director, U.S. Customs Service, Northeast Region, Bldg. 135, 2nd

Floor, Middletown, PA 17057.

Office of the Executive Secretary, Foreign-Trade Zones Board, U.S.

Department of Commerce, room 3716, 14th & Pennsylvania Avenue, NW.,

Washington, DC 20230.

Dated: December 28, 1993.

Dennis Puccinelli,

Acting Executive Secretary.

[FR Doc. 94-282 Filed 1-5-94; 8:45 am]

BILLING CODE: 3510-DS-P