Promega lands state tax credits for moving manufacturing jobs from California

July 29, 2018 GMT

Fitchburg biotechnology company Promega Corp. says it will save time, money and potential corporate headaches by manufacturing its highly technical instruments in the same city as the biological products with which those instruments are used.

So, Promega is moving 25 instrument production jobs from California to Fitchburg, to space it is leasing at 5500 Nobel Drive, about half a mile from Promega headquarters at 2800 Woods Hollow Road.

The company said it is investing $850,000 in the project to lease the space, remodel it and buy equipment.

Because of the new jobs, the Wisconsin Economic Development Corp. will provide Promega with up to $185,000 in state income tax credits, with the exact amount to be based on the number of jobs created through March 2019.

Promega representatives have declined to answer questions about the project.

According to the tax credit application filed with WEDC — obtained through a public records request from the Wisconsin State Journal — the 25 jobs pay between $23 and $50 an hour, amounting to an average base and incentive package of $85,000 a year, not counting benefits.

Promega has two manufacturing facilities in California. The one in San Luis Obispo makes organic compounds while the one in Sunnyvale makes “detection instruments, including the GloMax Discover System multimode plate reader,” according to the company’s website. Presumably, those devices will now be made in Fitchburg. Introduced in 2014, the GloMax Discover System is used with Promega’s reagents to study cell activity and gene expression.

In its application, Promega said scientific instruments have “relatively short life cycles in the marketplace of around three years,” so they must be continuously updated. Long-distance communications between employees in Wisconsin and California are time-consuming and “fraught with the potential for misunderstanding,” the company said, so it has decided to locate the instrument design and manufacturing resources in one city — Fitchburg — with the help from WEDC.

Instrument sales make up about 5 percent of Promega’s revenue now, but the industry is demanding more automation and analytics and that can work toward Promega’s benefit, the company said.

“Promega’s plans are to grow our instrument business in response to the industry trends as well as a means of selling more of our reagents,” the WEDC application said.

Founded in 1978, privately owned Promega has 1,500 employees with about 950 of them in Dane County, and has branches in 16 countries. The company sells more than 4,000 products used for scientific research, drug discovery and DNA identification and has more than $400 million in annual revenue.

Promega held a groundbreaking ceremony this month for a $190 million, 270,000-square-foot research and development center on East Cheryl Parkway that, when completed in 2020, will be bigger than any of the other more than one dozen buildings it already owns or occupies.

Long-distance talks are “fraught with the potential for misunderstanding.” Promega, WEDC application