02-31894. Foreign-Trade Zone 7-Mayaguez, Puerto Rico; Request for Manufacturing Authority, ChemSource Corporation (Bulk and Intermediate Pharmaceutical Chemicals)

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Puerto Rico Industrial Development Corporation (PRIDCO), grantee of FTZ 7, on behalf of ChemSource Corporation (ChemSource), requesting authority to manufacture bulk and intermediate pharmaceutical chemicals under FTZ procedures within FTZ 7. The application was formally filed on December 10, 2002.

The application requests authority on behalf of ChemSource to manufacture bulk and intermediate pharmaceutical chemicals under zone procedures within FTZ 7—site 4, L-381-0-80 (lot 2). The ChemSource facility is located at State Road No. 3, Km. 143, Guayama, Puerto Rico (12 bldgs., 170,000 sq. ft., on 45 acres).

The facility (129 employees) is currently used for the manufacture of bulk and intermediate pharmaceutical chemicals. The chemicals that are being requested for manufacture under zone procedures are etodolac, fluvoxamine maleate, lisinopril, metformin hydrocholride, nabumetone, sililad triptophol, amiodopine besylate and enalapril maleate. Foreign-sourced materials for these products currently include dicyandiamide, celite, toluene, sodium chloride, methanol, ethyl acetate, maleic acid, sodium hydroxide and hydrazine sulfate. Materials sourced from abroad represent some 50% of finished product value.

The application also requests to include general categories of inputs that have recently been approved by the Board for other pharmaceutical plants that may be used to produce the chemicals listed above: chemically pure sugars, protein concentrates, ethyl alcohol, natural magnesium phosphates and carbonates, gypsum, anhydrite and plasters, petroleum jelly, paraffin and waxes, phosphoric acid, other inorganic acids or compounds of nonmetals, ammonia, sodium hydroxide, zinc oxide, iron oxide, titanium oxides, hydrazine and hydroxylamine, fluorides, chlorides, chlorates, sulfites, sulfates, salts of oxometallic acids, radioactive chemical elements, compounds of rare earth metals, acyclic and cyclic hydrocarbons, derivatives of phenols or peroxides, acetals and hemiacetals, aldehydes, ketone function compounds, carboxylic acids, phosphoric esters and their salts, heterocyclic compounds, sulfanomides, hormones, vitamins, glycosides, diazo-compounds, essential oils, wadding, prepared glues and adhesives, catalytic preparations, diagnostic or laboratory reagents, prepared binders, acrylic polymers, cellulose, ion exchangers, self-adhesive plates and sheets, other articles of vulcanized rubber, plastic cases, cartons, boxes, printed books, brochures and similar printed matter, carboys, bottles, and flasks, aluminum foil, tin plates and sheets, and taps, cocks and valves.

Zone procedures would exempt ChemSource from Customs duty payments on foreign materials used in production for export. Nearly 25 percent of the plant's shipments are exported. 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 chemical products (duty free) instead of the rates otherwise applicable to the foreign input materials (ranging from 3.7%-10.7% on current production, and up to 20% on future production). ChemSource would also be exempt from duty payments on foreign merchandise that becomes scrap or waste resulting from the production process. FTZ procedures will help ChemSource implement a more efficient and cost-effective system for handling Customs requirements because of direct delivery. The application indicates that the savings from zone procedures would help improve ChemSource'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 of their receipt is February 18, 2003. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to March 3, 2003.

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: December 10, 2002.

Dennis Puccinelli,

Executive Secretary.