Aug 31, 2016

LI Company Plans Expanded Drug Manufacturing

Updated August 29, 2016 6:00 AM
By James T. Madore

A&Z Pharmaceutical Inc., a manufacturer of dietary supplements, is converting a warehouse in Hauppauge to production of generic prescription drugs, officials said.

The fast-growing business has received a greater number of orders for prescription drugs than it had anticipated, company controller Robert Tufariello said, citing marketing efforts by CEO Emma Li Xu.

The drugs are produced and sold by AiPing Pharmaceutical Inc., a subsidiary of Hauppauge-based A&Z. AiPing also provides product development and contract manufacturing to others.

Tufariello said last week that “due to our getting more business . . . we will be using warehouse and utility space for new manufacturing” at 350 Wireless Blvd.

He estimated the work would add 15 to 20 people to the payroll, which already was expected to expand by 24 in the next two years.

About 100 people already work at A&Z’s two facilities in Hauppauge: the Wireless Boulevard building and 180 Oser Ave. Records show employees earn, on average, $51,000 per year, excluding medical insurance and retirement benefits.

Tufariello told a meeting of the Suffolk County Industrial Development Agency that A&Z is selling 40 percent of the AiPing subsidiary to Baheal Pharmaceutical Group, a China-based drugmaker.

He said the deal would bring $10 million to the Wireless Boulevard project. The additional manufacturing space has nearly doubled the project’s price tag to $6.2 million, he said.

In February, the IDA granted A&Z $742,500 in tax breaks, including a 55 percent reduction in property taxes over 10 years that will save the company $396,500.

A&Z will likely be entitled to an additional $155,250 in sales-tax savings due to the larger expansion, according to IDA executive director Anthony J. Catapano.

A&Z is among about 25 manufacturers of vitamins, supplements and nutritional ingredients that have operations on Long Island. Together they have created hundreds of jobs and in return have received assistance from IDAs and the state.

A&Z’s 2015 sales totaled between $45 million and $50 million, with 98 percent derived from exports to China of D-Cal, a vitamin D and calcium supplement made in Hauppauge, CEO Li Xu told Newsday in February.

She also said A&Z takes its name from America and Zhongguo, the Chinese word for China. The company opened in the mid-1990s as the U.S. subsidiary of a Chinese government-backed pharmaceutical giant led by her father.

More recently, Li Xu has assumed sole ownership of A&Z, and in June 2014 one of its two divisions was spun off as Allegiant Health in Deer Park. The new business is run by her husband, Brian Z. Li.