Pharmaceutical distributor: New client will bring growth

Executives for MD Logistics, which expanded from Indiana to Stead in 2011, are eagerly awaiting the arrival of a large client in the second quarter of 2013 that's expected to boost total revenue from the company's northern Nevada operations from 5 to 20 percent.

MD Logistics purchased a 55,000-square-foot distribution facility in Stead in early 2011 and landed its first client in September.

The company targeted a western-region expansion in order to better serve growing markets throughout 12 western states. MD Logistics serves the rest of the country from its 700,000-square foot headquarters at Plainfield, Ind.

In addition to quicker shipping times and lower transportation costs to Western markets, the northern Nevada facility helps the company's pharmaceutical customers by spreading out their products over several bases of operations. It also allows MD Logistics to better tap into the strong biomedical industry in South San Francisco, which could provide a large pool of future customers.

The building formerly housed another pharmaceutical distributor, so MD Logistics was primed for business once it moved in.

"We were able to acquire the facility fully fixtured," says MD Logistics President and Chief Executive Officer Mark Sell. "It was the right use, the right need at the right time, and it worked out perfectly for us."

Sell has worked in third-party pharmaceutical distribution for almost three decades, and he says Reno was always a strong candidate to house a western expansion.

The company also did some in-house studies about the feasibility of serving its customers throughout the West from Reno.

"This was very well located from a distance and highway and infrastructure perspective," Sell says. "It just made sense to us."

MD Logistic's northern Nevada facility also could see some large growth from the company's retail distribution line, which is currently handled from its flagship facility. Moving those operations West better utilizes the capacity of operations in Reno, and it also frees up space at the cramped Indiana location.

"We fully intent to bring that business model here," Sell says. "As we continue to talk to our customers, we are going to continue to divert more inventory West for those customers, which will open up capacity back East. We will continue to level-load the two facilities."

MD logistics currently employs eight, but it expects to nearly triple its workforce as it ramps up with its expected client. The company will hire additional warehouse associates, materials handlers, quality control supervisors and other positions as it brings new clients onboard.

The company also could almost double its footprint in Stead by building a second facility if future business merited expansion, says Vice President Jeff Luthman.

"We see a need for our customers to continue to push West," Luthman says.