, , , , , , , , , ,

DePuy plans $27 million upgrade

Sherry Slater | The Journal Gazette

Last updated: August 4, 2011 6:09 p.m.

One of Warsaw’s Big Three is getting a little bit bigger.

DePuy Orthopaedics Inc. plans to invest $27 million in manufacturing and research equipment at its Warsaw operations, according to an abatement request filed with the city of Warsaw.

The orthopedic devices maker, which employs 1,150, doesn’t expect to add jobs as part of the project, according to the filing.

Warsaw officials this week approved the request, giving the company a 10-year break on taxes assessed on the machinery. The equipment is scheduled to be installed sometime before 2014.

The investment will be divided between manufacturing equipment, $20 million, and research and development equipment, $7 million.

Jessica Masuga, DePuy spokeswoman, wrote in an email that the equipment “will add important new state-of-the art capabilities and increase efficiency at the Warsaw facility.” She declined to comment further.

The planned spending spree is only one of several changes for the international company.

DePuy is also breaking in a new president, Andrew Ekdahl, who took office in June. His predecessor, David Floyd, resigned in February amid lawsuits alleging the company sold defective hip replacement implants.

Ekdahl’s career with the company spans more than 20 years with responsibility for operations on multiple continents.

Biomet Inc., Zimmer Holdings Inc. and DePuy lead the orthopedics industry cluster in Kosciusko County. Health care products maker Johnson & Johnson is DePuy’s parent company.

The orthopedics industry combined to produce a $3.7 billion impact on Kosciusko’s economy in 2009, according to study results released in April by OrthoWorx. The Warsaw-based non-profit supports the orthopedics industry.

The study by the Business Research Center shows that in 2009, Kosciusko County’s orthopedic industry cluster provided 13,000 jobs, generated $2.4 billion in direct output and paid $114 million in state and local government tax revenue.

The average annual wage for the county’s medical device workers was more than $70,000, which is more than $11,000 greater than the state average and $12,000 above the national average.

George Robertson, president of the Kosciusko Economic Development Corp., said economic development professionals especially like to see two types of business spending: equipment and R&D.

When companies invest in equipment, they are continuing to remain state-of-the-art, he said. When they invest in research and development, the company is creating new and better products, he said.

“There was never a question” whether Warsaw officials would approve the abatement request, said Robertson, who didn’t work with DePuy on this project. “Those are great investments by a great company.”