Chattem clears decks

Chattem clears decks

April 22nd, 2011 by Mike Pare in News

Chattem is bolstering its warehouse and distribution operation, and it plans to start making one of its new Allegra products in Chattanooga, officials said Thursday.

"It's ... a continued focus on the growth of the business and how we can continue to expand," said Robert Long, Chattem's chief financial officer.

Chattem is leasing 690,000 square feet of warehouse space off Wauhatchie Pike from Kenco affiliate JDK Real Estate and investing about $5 million in the site, Long said.

Ron Kosko, Chattem's director of distribution, said the company is consolidating operations from five facilities around the city.

Employees will use part of the site to assemble product floor stands and displays that go into stores, he said.

The building also provides Chattem with some temperature-controlled space, Kosko said. About 100 to 125 people will work in it, he said.

Plant to make hot seller

Long said Chattem plans to start moving into the new location in late May to early June.

"It's really efficiency of movement and thinking of future expansion," he said.

In another move, Chattem plans to start making Allegra children's allergy medicine at its recently expanded Broad Street plant, Long said.

He said the company is working on U.S. Food and Drug Administration approval. Long said Chattem parent Sanofi-Aventis is closing a facility elsewhere, which allows Chattem to bring that production to the city.

Plans are to use existing personnel initially, though as production ramps up the company could do more hiring, he said. If approved, production could start by early 2012, Long said.

Carrie Brown, a Sanofi spokeswoman, said the French pharmaceutical giant is pleased with the launch of Allegra by Chattem earlier this year as an over-the-counter medicine from a prescription drug.

"We're clearly committed to the consumer health care business and growing that business," she said.

Long said all of Allegra that goes to the over-the-counter market in America is shipped out of Chattanooga.

"We needed to do something," he said about its distribution efforts. "With the Allegra product, it was really necessary."

Zan Guerry, Chattem's chief executive, has said the company is aiming for annual Allegra sales of $250 million to $350 million. Before Allegra, Chattem's sales for all its other products, such as Icy Hot and Gold Bond, were more than $400 million.

Paris-based Sanofi bought Chattem for $1.9 billion in cash in a deal that closed in 2010.