The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority’s (GBPA) is “deeply saddened” by PharmaChem Technologies imminent closure amid fears it will further depopulate an already-shrinking Freeport.

Rupert Hayward, the quasi-governmental authority’s executive director, when contacted by Tribune Business, disclosed that the GBPA has “reached out” to the pharmaceutical drug maker’s principals to assist “where we can” and is seeking to do likewise for the 120 staff who will be terminated tomorrow.

He said: “The Grand Bahama Port Authority is deeply saddened by the news of the imminent closure of PharmaChem Technologies. The company has been an exemplary corporate citizen and licensee, and its president, Pietro Stefanutti, a model investor who has given a great deal to the community of Freeport over the years.

“Recognising that this is a very sensitive time for the company and its employees, GBPA has reached out to Mr Stefanutti to express our willingness to try and help where we can. GBPA will also try to do what we can to help those Bahamian workers who stand to lose their jobs including, where possible, helping them find new employment within the city of Freeport.”

Mr Hayward’s comments came as Prime Minister Philip Davis KC revealed that the Government had sought to intervene to prevent PharmaChem Technologies’ closure upon hearing of the company’s plans but to no avail.

He added that his administration had also approached the company’s sole customer, Gilead Life Sciences, to see if any of the 120 impacted workers can be “redeployed” elsewhere within its global operations until the Freeport plant’s fate is resolved.

Speaking to reporters during the Majority Rule Day festivities yesterday, Mr Davis acknowledged that tomorrow’s cessation of operations is a “blow to the Grand Bahama economy”.

He said: “That is a blow to the Grand Bahama economy and, sadly, we tried to intervene but, unfortunately, the issue that involves that high-tech company is such that we are unable to bring any resolution to that challenge.

“We are hopeful that the employees are being impacted by it will be sorted out, according to our laws, and hopefully we’ll be able to try to retrain and find a place for them elsewhere. My conversation with the hierarchy of Gilead, which is the key figure in all of this, is to see whether they can be redeployed elsewhere until there’s a solution for the plant.”

The Prime Minister’s comments hint at the situation which Tribune Business understands led to PharmaChem Technologies’ closure. The company is understood to have encountered “technical and operational issues” with its $400m plant expansion, which one contact labelled as “a very ambitious project”.

The expansion, designed to expand the range of drugs supplied to Gilead, was said to have gone significantly over-budget due to cost overruns. And both Hurricane Dorian and the COVID-19 pandemic delayed the construction completion and production of test batches.

“In the chemical world, they have to do test batches, and each batch has to meet specific criteria before they can do a production run,” one contact, speaking on condition of anonymity, said. It is understood there were quality issues with these test batches, while some PharmaChem staff were said to be reluctant to work the 24-hour production shift system that was required to meet Gilead’s orders.

Ultimately, with the Grand Bahama-based manufacturer unable to meet Gilead’s desired production timelines and volumes, the latter pulled its financial support from PharmaChem, resulting in Monday’s closure announcement and the termination of staff.

Magnus Alnebeck, Pelican Bay’s general manager, was among those voicing concerns over whether PharmaChem’s staff will find similar well-paying jobs in Freeport’s economy - given that they worked in a highly-specialised field - and if they and their families might now need to leave the island to search for work.

“Those are well-paid Bahamians who have homes and are part of the community,” he told Tribune Business. “Where do they go now? What sort of jobs can they find in Grand Bahama. That’s our biggest problem; that our population keeps on shrinking and shrinking in Grand Bahama. It’s just to hope here are better things to happen around the corner.”

Mr Alnebeck said his resort would feel the closure’s impact as he voiced hope that a buyer may be found to acquire the plant. “They are not an enormous purchaser of room nights but they are a good client of ours, and whenever they had engineers coming and going they would stay with us,” he added.

“I haven’t run the numbers to see what they purchase, but they had a lot of work with the upgrades to the plant so they had more people coming and going in the last year. It’s a solid business that has been there for many years, and people who were working there were making good money and Mr Stefanutti is part of the infrastructure in Freeport.

“It is a blow. The main concerns is the 100-plus employees who are well paid and will have a problem finding new jobs at that level. That’s the main concern. It’s an asset sitting there that, for the right person and right company, I’m sure there’s a value to it. It’s just a question of finding the right company.”

Several sources suggested PharmaChem’s move has dealt a devastating blow to investor confidence in Freeport and Grand Bahama, with one saying: “The investor confidence index is at zero.” However, James Carey, Grand Bahama’s Chamber of Commerce president, said he “can’t see it tremendously impacting” international investors whose projects are already “lined up”.

“The greater impact will be the local economy and the immediate impact on that,” he added. “I hope it doesn’t start to diminish confidence of local entrepreneurs and businesses which, in recent times, has been more upbeat so I hope it doesn’t put a damper on business people.”

PharmaChem, which was founded by Italian entrepreneur, Pietro Stefanutti, supplied antiretroviral API drugs (tenofovir disoproxil fumarate) for Gilead, which employed them in the worldwide treatment of HIV/AIDS. This product helped treat one million persons worldwide, and the new plant was intended to give it the capability to produce an additional two to three drugs.

“We manufacture the single API for Gilead, the anti-retro viral drug for HIV/AIDS. We are looking for a sustainable future by diversifying our product line, and the new facility will be a multi-product facility so we can handle two or three products at the same time,” said PharmaChem chief executive, Randy Thompson, in 2018.

“The best-kept secret in The Bahamas - right here we actually produce material that treats more than one million HIV/AIDS patients around the world. Gilead is committed to offering product at a discount price at cost to various countries. Like Gilead, we at PharmaChem believes it is our responsibility to extend medicine beyond developed countries around the world.”