GSK invests in Cumbria after Budget tax relief

GlaxoSmithKline plans to spend £350m building a new factory and hiring hundreds of new workers at its site in Ulverston to increase production of active ingredients for antibiotics and vaccines.

The factory will be the first new GSK manufacturing facility to be built in the UK for nearly 40 years. The company also announced investment in the company's two manufacturing sites in Scotland at Montrose and Irvine. In total, it is anticipated these investments will create up to 1,000 new jobs over the lifetime of the projects.

Detailed planning and design of the new facility will now begin, with an anticipated start date for construction of 2014/15 dependent on portfolio timing and obtaining necessary planning and related consents. Once construction starts, it is likely to take at least six years before the plant is fully operational.

GSK said in a statement it is "considering further significant manufacturing investment at Ulverston which could double the total investment at the site to approximately £700m and create further jobs in the longer term, depending on continued improvements in the environment for innovation in the UK."

The investment follows confirmation by the Government in the Budget yesterday that it will implement a 'patent box' to encourage investment in research and development and related manufacturing in the UK, by introducing a lower rate of corporation tax on profits generated from UK-owned intellectual property.

Sir Andrew Witty, chief executive of GSK, said: "The introduction of the patent box has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain.

Consequently, we can confirm that we will build GSK's first new UK factory for almost 40 years and that we will make other substantial capital investments in our British manufacturing base. In total, this will create up to 1,000 new jobs over the lifetime of the projects. We are also actively considering other investments in our UK manufacturing network which would create further jobs and reinforce the UK's international competitiveness and as a world leader in life sciences."

Prime Minister David Cameron said: "This is excellent news, a major investment that will create many highly skilled jobs and provide a great boost to the economy. It shows why we are right to cut business tax and focus on making the UK a dynamic and competitive place that can attract exactly this type of high tech investment. We have a world class life sciences industry, and I am determined not just to keep it here in the UK but significantly increase it too. We cannot be complacent, the industry is changing, and we must change with it. Our innovative life sciences strategy and ground breaking patent box are already making a difference, helping to grow this important industry and ensure the great discoveries of the next decade happen here in British laboratories."

GSK employs around 15,000 people in the UK, including 6,000 in manufacturing. GSK's Ulverston site currently employs around 240 people and manufactures key ingredients for antibiotics.