The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Grand Bahama businessman says he is “not surprised” that PharmaChem Technologies will cease operations tomorrow as the “writing was on the wall” from a few years prior.

Greg Langstaff, owner of the Grand Bahama Brewing Company, told Tribune Business he understood the pharmaceutical drug maker had been experiencing difficulties for the past three years.

“I guess it’s been coming for a couple of years, and the writing has been on the wall,” he added. “I don’t think it’s too sudden to most of the employees there. But they were decent paying, good professional jobs and they are no longer.”

Mr Langstaff suggested PharmaChem’s closure is unlikely to be temporary as it has “gone through a cycle of ownership and changed hands a couple of times”. He added: “I heard it had closed and I heard earlier that it was likely to close.

“This is not surprising, but there are a number of people there who had good paying jobs and will go and get good jobs elsewhere. It didn’t come to a surprise to any of the employees there that’s for sure. But it’s going to be felt in Grand Bahama.”

Adding that the Carnival cruise port and other projects “cannot replace” the jobs lost at PharmaChem, Mr Langstaff added: “It would be great if they focused on getting the Grand Lucayan sold and re-owned and working again. The need to work on the Grand Lucayan because, frankly, that will create a whole lot more jobs than PharmaChem did.”

Tribune Business understands that the closure comes after PharmaChem ran into “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 the company’s sole client, Gilead Life Services, 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 yesterday’s closure announcement.

The focus for Grand Bahama must be to develop the tourism product after the PharmaChem closure. The Our Lucaya must be sold and reopened and other tourism related projects must come on stream.

Alfredo Bridgewater, owner/operator of Coco Nutz, who has a family member that works at PharmaChem, said business closures were “the last thing” Grand Bahamians needed to see “considering things are much slower since Hurricane Dorian and we haven’t had anything major or good happen for the island in quite some time”.

He added: “The Carnival project is good, but it’s still a year or two off and PharmaChem is kind of a specialised field, so you have a lot of specialised people now out in the workforce. So it’s not a good thing for Grand Bahama.”