GlaxoSmithKline plc (NYSE:GSK) is planning to inject $360.3 million (£275 million) in three Britain-based plants following the surprising boost it experienced post-Brexit. The bold move further establishes the company’s confidence in the UK amid the issues confronting the nation, particularly the companies bailing on it given the massive market uncertainties.
The pharmaceutical giant is looking at the manufacturing sites in Barnard Castle in England, Montrose in Scotland, and Ware in London. GlaxoSmithKline will invest £92 million at the Barnard Castle plant, £110 million at the Montrose plant, and £74 million at the Ware plant. Primarily, the company is tapping these locations to enhance its respiratory and biopharmaceutical product portfolios with improved dedicated production plants in one of its biggest markets.
GlaxoSmithKline believes that the UK is still a good market given the attractively low tax rates and skilled labor force as well. Britain accounts for almost half of the company’s overall research and development (R&D) facilities and initiatives and about 33% of its worldwide manufacturing. Presently, the three facilities in the UK alone already employ nearly 2,800 workers. About 16,000 GSK workers are deployed in the entire UK. With the expansion of these sites, GlaxoSmithKline is expecting to provide more employment opportunities in the UK.
Andrew Witty, GlaxoSmithKline CEO, reiterated that the company’s long-term prospects in the UK are generally driven by the nation’s innovative biotechnology resources and potential regardless of the decision to leave the European Union (EU) last month.
Q2 Financial Highlights
New pharmaceuticals and vaccines sales more than doubled year-over-year to over £1 billion from £446 million. The strong performance during the second quarter is attributed to the continuous growth of HIV medicines and new respiratory disease treatment sales. The Consumer Healthcare business also surged 7% year-over-year to £1.70 billion. The better-than expected results were also largely driven by the declining pound.