04-26565. Foreign-Trade Zone 7-Mayaguez, PR; Application for Subzone, Ortho Biologics, LLC (Pharmaceutical Intermediates), Manatí, PR

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Puerto Rico Industrial Development Company (PRIDCO), grantee of FTZ 7, requesting special-purpose subzone status for the pharmaceutical intermediate manufacturing facility of Ortho Biologics, LLC (OBI) in Manati, Puerto Rico. OBI is a subsidiary of Johnson & Johnson. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally filed on November 19, 2004.

The OBI facility is located within a Johnson & Johnson-affiliated complex (10 buildings, 128,548 sq. ft. on 58.518 acres) located at State Road No. 2, Km. 45.6 in Manati, Puerto Rico. The property is owned by Ortho-McNeil-Janssen Pharmaceutical, Inc., which produces finished pharmaceutical products at one of 2 manufacturing plants at the site. Only the OBI plant will be activated at this time. The OBI plant (218 employees) is used for warehousing and manufacturing of EPO bulk intermediate; activities which OBI is proposing to perform under FTZ procedures. Most of the intermediate is exported for further processing into a hormone which stimulates red blood cell production for the treatment of anemia. Foreign-sourced materials will account for some 14 percent of the bulk intermediate's value, and include Q-sepharose, citric acid, TRIS-HCL and Tris Base.

Zone procedures would exempt OBI from Customs duty payments on foreign materials used in production for export. At least 95 percent of the EPO bulk intermediate will be exported. The remaining five percent will be shipped domestically to a contractor to be processed into finished product that is then exported to Canada. On domestic shipments, the company would be able to defer Customs duty payments on foreign materials, and to choose the duty rate that applies to the EPO bulk intermediate (duty-free), instead of the rates otherwise applicable to the foreign input materials noted above (predominantly active ingredient, Q-sepharose, 3.9% ad valorem). OBI would also be able to avoid duty on foreign input which becomes scrap/waste, estimated at 10 percent of imported material. The application also indicates that OBI may realize logistical/procedural benefits from subzone status. All of the above-cited savings from zone procedures could help improve the plant's international competitiveness.

In accordance with the Board's regulations, a member of the FTZ Staff has been designated examiner to investigate the application and report to the Board.

Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at one of the following addresses:

1. Submissions Via Express/Package Delivery Services: Foreign-Trade-Zones Board, U.S. Department of Commerce, Franklin Court Building—Suite 4100W, 1099 14th St., NW., Washington, DC 20005; or

2. Submissions Via the U.S. Postal Service: Foreign-Trade-Zones Board, U.S. Department of Commerce, FCB-Suite 4100W, 1401 Constitution Ave., NW., Washington, DC 20230.

The closing period for their receipt is January 31, 2005. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to February 15, 2005).

A copy of the application and accompanying exhibits will be available for public inspection at the Office of the Foreign-Trade Zones Board's Executive Secretary at address Number 1 listed above, and at the U.S. Department of Commerce Export Assistance Center, 525 F.D. Roosevelt Ave., Suite 905, San Juan, PR 00918.

Dated: November 19, 2004.

Dennis Puccinelli,

Executive Secretary.