Everything you need to know about CapEx projects in the Life Sciences industry
When the pandemic struck in 2020, the power of the Life Sciences industry was felt across the world. The swift COVID-19 vaccine development, and revolution in mRNA technology, has channelled renewed confidence – and investment – into the sector.
As a result, the UK government is helping drive innovation in the industry. With strategic funding into medicine and diagnostic manufacturing as per the Life Sciences Vision initiative, companies are being encouraged to embrace new technologies and build or expand facilities through the country.
These kinds of facility construction and expansion projects through government funding in Life Sciences are known as Capital Expenditure (CapEx) projects.
What are Capital Expenditure projects?
CapEx projects in Life Sciences involve the acquisition and upgrade of infrastructure to create new facilities for research and development as well as manufacturing. Such investment is key to ensuring the sector continues to keep up with increasing demand. During the heights of the pandemic, we saw pharmaceutical and biopharmaceutical organisations working at an accelerated pace to churn out vaccines, and this ‘need for speed’ is a now an expectation. As such, new Life Sciences CapEx projects are unfolding across the world.
Greenfield and brownfield projects are the two main subsets of CapEx projects in the Life Sciences sector.
Greenfield projects refer to manufacturing facilities that have been built from the ground up. An appropriate, rural piece of land is selected, planning permission obtained and a brand-new facility is constructed.
- Flexibility: Building a new facility from scratch allows the manufacturer more flexibility when customising a design to fit the company's unique requirements. Because of how highly regulated the Life Sciences industry is, facilities need to meet different health authorities standards in each country such as FDA standards for cGMP in order to be considered safe for production.
- Maintenance: New build operations come with the advantage of brand-new materials, technology and equipment. This means that throughout the facility's lifeline, it is less likely to encounter costly upgrades than older infrastructure.
- Rural Location: As the name suggests, Greenfield capex projects tend to be located in areas of expansive green areas Ireland's Life Sciences scene is a growing market in part due to the space and flexibility on offer to manufacturers. However, for this reason local authorities can become upset with the prospect of a large manufacturing facility being brought in and impacting their community. It can also make hiring employees and sourcing materials more difficult than in an urban location.
Brownfield projects are when a life sciences organisation obtain an existing facility or site and typically in a more urban location. The manufacturer will purchase or lease the existing structure and perform the necessary renovations and modifications to get the site up and running.
- Cost: With basic infrastructure still in place, the cost of building onto a brownfield site is greatly reduced. It is likely that the things like roads, drainage and electrics are in place (be it requiring work to make functional) which can take down some of the price tag.
- Speed: Brownfield sites are implemented much faster. Without the wait for the infrastructure to be constructed, the turnaround time can be greatly reduced and disruptions to the build are minimised.
- Higher chance of complications: Building on an existing facility can lead the project into some unexpected issues. Older structures may not adhere to current building regulations or there could be embedded issues in the infrastructure, and these kinds of potential complications could cost the project time and money.
Quanta are experts in CapEx
Here at Quanta, Life Sciences CapEx projects are a specialism of ours. For 30 years we have been successfully supporting the design, construction and installation of CapEx projects across the world with our expansive network of skilled professionals. We deliver through the full cycle of the CapEx project, including:
- Project Management
- Engineering / Automation
- Commissioning, Qualification, Validation (CQV)
- Quality Assurance (QA)
- Operational Readiness
Supporting large scale CapEx projects with CQV
CQV is a key area of business here at Quanta. In fact, we have the strongest network of contractors in CQV, an important stage of a pharmaceutical CapEx project. Even in greenfield projects, all equipment on site needs to go through the commissioning, qualification and validation process.
A successful CapEx project Quanta has supported is a $450 million new-build bulk drug substance facility in Dublin on behalf of one of our American biopharmaceutical partners. With a strong reputation of supporting similar projects and our longstanding experience with CQV, we were a natural choice to help implement a team of skilled Validation, Process and CQV Engineers. We knew that this would be a fantastic opportunity for contractors in the field to add significant industry experience to their CV, so got to work reaching out to candidates. Drawing on our established global network, we sourced over 50 contractors from Ireland, the UK, Scotland, the Netherlands and Canada which helped get this CapEx project quickly off the ground.