Pharmaceutical maker lays off workers; could owe state money
Published: January 14,2014
Tags: Craig Hitt, economic development, employment, incentive, jolb, Kemper County Economic Development Authority, layoff, manufacture, manufacturer, manufacturing, Mississippi Department of Employment Security, Mississippi Development Aiuthority, Pharma Pac LLC, phartmaceutical, State of Mississippi, unemployment, work, worker
DEKALB — A Kemper County drug maker has laid off about 75 employees, leaving questions about its future and whether it has to repay economic development money.
Pharma Pac LLC made the layoffs Dec. 19, according to a notice filed with the Mississippi Department of Employment Security.
Kemper County Economic Development Authority Executive Director Craig Hitt said the DeKalb company has about 80 remaining workers.
That calls into question whether Pharma Pac is meeting an agreement in which the state gave it $500,000 to buy and renovate a building. That agreement requires Pharma Pac to employ 179 through Sept. 30, 2014.
Pharma Pac, which makes and packages drugs with a focus on creams and ointments, hasn’t returned calls or emails from The Associated Press seeking comment.
Hitt and Mississippi Development Authority officials met with company officials Thursday to inquire about its status.
“The company is obviously struggling at this point,” Hitt said.
Rent said that a new entity had assumed a controlling interest in Pharma Pac and had installed new managers. The name of the new owner wasn’t immediately clear yesterday, but a Nashville, Tenn., venture capital firm called First Avenue Partners made an investment in Pharma Pac’s parent company in 2010, according to a press release then.
The state directed $500,000 in bond proceeds in 2005 to allow Kemper County to buy and expand a factory in DeKalb, with the company promising to hire 90 new employees. Pharma Pac also received $60,000 in services from the county and a $740,000 loan from the U.S. Department of Agriculture’s rural development arm.
MDA spokesman Jeff Rent said Pharma Pac misstated its employment at the time of the initial agreement. The company did not meet employment targets in 2010 and 2011, repaying at least $167,000 to the state. But in 2012, MDA signed an amended agreement reflecting that company had only 89 workers in 2005 and not the 115 it originally said. With a lower job target of 179, the company met its obligation in 2012, state Auditor Stacey Pickering’s office found.
Just because numbers have fallen low now doesn’t mean the company will be required to repay money. Rent said the next time the state will officially check employment numbers will be in the summer.
“It’s in everybody’s best interest to get the company to a better position,” Rent said.
Pharma Pac was Kemper’s largest private employer, with as many as 180 employees. Though Mississippi Power Co. is investing $5 billion to build a power plant and coal mine in southern Kemper County, Hitt said Pharma Pac’s struggles are alarming to the rural area.
“They’re vital to Kemper County, even with the cutback they’ve had,” he said.
To sign up for Mississippi Business Daily Updates, click here.
One Response to “Pharmaceutical maker lays off workers; could owe state money”
Top Posts & Pages
- Spivey named Under 40 Business Person of the Year by the Mississippi Business Journal
- Bids on reworking Interstate 55 stretch are rejected
- JACK WEATHERLY: Economic development in these parts is a ‘family’ business
- Two new casinos like the odds on Mississippi Gulf Coast
- Report ranks state schools' performance 51st in the nation
- The leadership styles of President Obama
- JACK WEATHERLY: Finding a house, defending a neighborhood, finding a voice
- Nehi Bottling Company has been a Cleveland fixture for 85 years
- WRESTLING SUCCESS — Ted DiBiase Jr. leaves ring to become entrepreneur