Best distribution location in U.S.
Logistics businesses working hard to relocate firms to city
The work logistics businesses are doing to improve the work force, form alliances and sell Memphis stand to extend the region's shipping prowess into high-end biologics, the fastest-growing piece of the pharmaceutical industry.
"The work you're doing with work-force issues and your connections in Belgium are very impressive," Ross Bjella, president of DDN Pharmaceutical Logistics, told the Regional Logistics Council Thursday. "You're doing better than the rest."
DDN, one of the largest logistics companies in the pharmaceutical industry, opened its main distribution center in Memphis in 1995. Today, it has 360,000 square feet, 120 employees and plans to expand. "We tell the Memphis story every day in our presentations to clients," Bjella said. "It is truly part of who we are."
Most pharmaceutical products have two to five days to get to the customer, "and sometimes, they only have overnight," Bjella said.
"That's something Memphis has. There are not many places where you can be at your destination within hours."
DDN also has a distribution center near FedEx's California hub. "Most international clients know where and why we'd be in L.A., so we educate them why we consider Memphis to be the best distribution location in the U.S.," Bjella said.
As the pharmaceutical industry increasingly moves to biologics -- medicines or cures derived from human tissues or living organisms -- the speed of shipping and the integrity of the supply chain become more important, serving Memphis a key volley.
Biologics, now growing at 15 percent a year, is expected to show 22 percent annual growth by 2010.
Because the shipments tend to be low volume, but remarkably high value -- (a pallet of biologic products could be worth $20 million) -- the margins for shippers are high.
"It's ideal for air freight. Where better to locate than Memphis?" said Mike Demster, vice president of international and technology business development at the Memphis Regional Chamber.
Four of the top 13 pharmaceutical producers in the nation already have major operations in Memphis, including Johnson & Johnson, Schering-Plough Corp. and Pfizer.
City leaders are courting more, setting up exchanges, for example, with scientists and educators in Belgium, a fast-growing biosciences center in Europe.
TiGenix, the first Belgium company to come, opened a cell manufacturing facility on Shelby Drive last year, making a reconstituted cartilage that, if approved, will be used in knee repairs.
While the company now is manufacturing what it needs for clinical trials, it chose Memphis to save costs associated with storing and shipping high-value goods.
"These international relationships take time," Demster said. "Through the TiGenix experience and some of the other dialogues we've had, we've developed a good relationship with some of the key players in Belgium."
Last summer, a group from Belgium came to Memphis "to look at the Memphis model of distribution," Demster said.
This fall, a Memphis contingent is planning a return visit.
"It will be an opportunity for us to give the Memphis pitch. If they want to introduce projects into the U.S. market, we can make a case that Memphis is the best place to do it," Demster said.
Contact Jane Roberts at 529-2512