By Bryan Manabat
[email protected]
Variety News Staff
A MYANMAR-BASED pharmaceutical company planning to establish a manufacturing plant in the Northern Marianas could lay the groundwork for an entirely new industry in the Commonwealth, according to Commonwealth Economic Development Authority board member Mike Sablan.
Sablan said the investor — operating locally under CNMI Investment LLC — has completed three exploratory visits to Saipan and has formally submitted an application under the CNMI’s qualifying certificate program. The company, known internationally as Pacific Pharmaceuticals, currently operates a manufacturing plant in Myanmar and another in Rancho Cucamonga, California, Sablan said.
“They heard about the CNMI during a visit to Guam last year or the year before. While in Guam, they learned about what the CNMI offers in terms of competitive advantages for businesses, so they came over — I think it was in April,” he added.
Sablan said the company’s first trip to Saipan was a fact-finding mission, during which CEDA introduced the investors to permitting agencies, shipping companies and other regulatory offices. A second visit followed, with the company expressing “serious interest” in establishing operations in the CNMI.
By their third visit “a couple of months ago,” Sablan said, the company had decided to invest and hired a local consultant to assist with the QC application process.
The company initially plans to manufacture nonprescription pharmaceutical products, with the possibility of expanding into prescription drug production in the future.
Sablan said the investment is “in the millions,” though he did not provide a specific figure. The company is currently searching for warehouse space.
Investment tool
The CNMI’s qualifying certificate program, created under the Investment Incentive Act of 2000 and administered by the Commonwealth Economic Development Authority, offers negotiated rebates and abatements on taxes such as the Northern Marianas Territorial Income Tax.
A QC functions as a contract. Investors receive tax incentives for a set period in exchange for meeting obligations such as capital investment, job creation, community contributions, annual reporting and compliance with CNMI laws.
Approval requires a detailed application, agency review and a public hearing. Certificates may be modified or revoked if investors fail to meet their commitments.
Potential
Sablan said the broader economic impact could be significant if the project succeeds.
“I think the real benefit to the CNMI would be if this first pharmaceutical manufacturing plant is successful — it could spawn a whole new industry and attract other pharmaceutical businesses,” he said. “We’re looking at that approach where we’re willing to offer as much as we can to the first investor, and that would incentivize others.”
He added that the same competitive advantages that attracted Pacific Pharmaceuticals — cost structure, location and incentives — could appeal to other manufacturers.
Investor interest
Sablan said the pharmaceutical proposal is one of several investment inquiries CEDA is handling. These include:
• An electric vehicle manufacturing prospect;
• an agricultural commercial venture; and
• a light manufacturing investor that has been conducting due diligence for nearly a year
He said recent outreach efforts — including a roadshow in Malaysia, Singapore, Thailand and the Philippines, as well as participation in SelectUSA conferences — have generated stronger interest.
“We’ve been quite busy,” Sablan said. “These things don’t occur overnight. We need to educate them and inform them of the processes here — the requirements, the incentives. In the end, it’s a business decision. We hope to steer them toward investing.”
Bryan Manabat was a liberal arts student of Northern Marianas College where he also studied criminal justice. He is the recipient of the NMI Humanities Award as an Outstanding Teacher (Non-Classroom) in 2013, and has worked for the CNMI Motheread/Fatheread Literacy Program as lead facilitator.
