Scio Township's Terumo Heart concludes $3.6 million expansion for medical device production
One of the Ann Arbor area’s largest life sciences companies is concluding a $3.6 million office expansion that prepares it for growth as its DuraHeart product heads toward the national medical device market.
Terumo Heart - a wholly owned subsidiary of the Terumo Corp. of Japan - is adding offices and manufacturing space in Scio Township.
Its DuraHeart device, currently being sold in Europe, is in U.S. clinical trials. The trials mean the company needs to both increase production capacity and reduce how long it takes to produce the device, which offers long-term circulatory support for patients waiting for a heart transplant, said Salman Ahmad, accounting manager.“We’re trying to cut down our (manufacturing) lead time from six months to four months,” Ahmad said.
The complex devices require highly specialized equipment and staffing to produce, Ahmad said.
By expanding into a 50,000-square-foot building and adding 14,700 square feet to it, more of the manufacturing and quality controls will be done in-house with local employees, Ahmad said.
The Terumo Heart expansion is one of two underway on the three-building Terumo campus located west of Ann Arbor - between Jackson Road and I-94, west of Zeeb Road - where Terumo Cardiovascular Systems Corp. occupies two buildings.
“(Both) branches of Terumo have been expanding rapidly in Ann Arbor,” said Barbara Schmid, director of corporate communications for Terumo CVS.
Total Terumo employment on the site is nearly 500, Schmid said, including 356 at Terumo CVS. That number includes 52 new hires since the company obtained a state tax credit in 2008 to move R&D facilities from California to Scio Township - a hiring pace that exceeds projections.
Terumo CVS is reconfiguring its space as Terumo Heart moves into its own expanded facility on the campus.
Meanwhile, Terumo Heart employs 136, after a 10-percent annual growth rate over the past few years that the company expects to continue, said spokesperson Carmen Fox.
Of the $3.6 million investment in the Terumo Heart facility, about $2 million was dedicated to facility upgrades That includes consolidating offices from around the campus into a single building, and about 20,000 square feet of upgraded production space.
The rest of the investment will fund equipment purchases as the final weeks of construction are finished this fall, Fox said.
The move helps distinguish Terumo Heart from Terumo CVS, Ahmad said. The two had been paired when Terumo Heart started as an independent company in 2003, and they still share some back-office support functions.
“It shows that we’re maturing as a company,” Ahmad said of the move.
Meanwhile, Terumo Heart is seeking a tax abatement through Scio Township, officials said.
The tax abatement “hasn’t been granted yet, but obviously it’s an expansion of an existing business here and creating new, high-tech jobs, which is what everyone is looking for,” said Scio Township manager Darrell Fecho.
Township officials will hold a public hearing on the request at their Oct. 27 meeting, Fecho said.
The application promises still more job creation at Terumo Heart, Ahmad said.
Terumo Medical Corp., headquartered in Japan, employs 12,000 worldwide and makes over 1,200 products. It acquired the Ann Arbor-based Sarns-3M in 1999.