Outsourcing cuts two ways.
It upends the old way of doing business by moving established local jobs to lower-cost areas, either across the country or across the globe.
The lesser-known flip side is that it can spur new investment and new employment opportunities.
A North Carolina pharmaceutical business with a fleeting link to the Medical University of South Carolina says it's a testament to the latter. AAIPharma Services Corp. last week announced it is expanding its North Charleston outpost for the second time in the past year.
“We made a decision to continue to build infrastructure in the United States and add jobs locally,” said CEO Patrick Walsh.
“A lot of our competitors have decided to outsource this work around the world in other regions,” Walsh continued. “We feel ... we can compete with those companies with high-class facilities here in the Carolinas and in the United States.”
The twist is that AAIPharma doesn't actually concoct or own patents to any drugs.
Rather, it's a free agent. Bigger cost-cutting pharmaceutical makers and biotechnology firms hire the company when they want to farm out some of their production and clinical research work.
That trend is “in vogue, for sure” within the drug industry, Walsh said.
“We're seeing more and more of it being outsourced,” Walsh said. “While it's been a negative for jobs on the 'Big Pharma' side — there's been a lot of downsizing there — it's provided a real vehicle of growth for our business model.”
The firm's expansion comes as the U.S. manufacturing sector is reclaiming some long-lost jobs. General Motors last week announced it's moving the production of its Chevrolet Camaro back to Michigan from Canada, citing improved business conditions domestically.
Closer to home, a textile maker turned the off-shoring trend on its head: India- based Sarla Performance Fibers said a few week ago that it will shell out almost $14 million to reopen a vacant plant in Colleton County and employ roughly 100 workers making yarn and thread next spring.
AAIPharma's local lab and manufacturing facility was originally established in 1995 by MUSC's Health Sciences Foundation under the name Pharmaceutical Development Center.
MUSC sold the business, then operating as a not-for-profit group, to a predecessor of Wilmington-based AAIPharma about a decade ago for $5.8 million.
The privately held company does not disclose revenue or clients, but the 500-worker business works with almost all of the top players in the pharmaceutical and biotech industries from sites in the Carolinas, New Jersey and Missouri.
AAIPharma's site on Faber Place Drive off Leeds Avenue is set up specifically to manufacture and test injectable drugs, Walsh said.
“We make some of the leading products on the market today,” he said.
A year ago, the company said it was adding new equipment and another filling line.
Its latest expansion will reconfigure the existing space, and it includes another vial filler, a new clean room and machinery that minimizes the loss of costly active ingredients in the drugmaking process.
“What we announced ... will allow us to double our manufacturing capacity,” Walsh said.
He estimated the expansion could add between 20 and 50 employees to the company's local payroll.
“It's real gem for the Charleston area,” he said of AAIPharma's operation. “There's not really a lot of high-tech manufacturing in the area that does this type of work.”
Contact John P. McDermott at 937-5572.