B. Braun Medical, the third largest medical device maker in Orange County, is set to finish a $500 million modernization of its 29-acre Irvine campus this year.
The seven-year endeavor has consisted of replacing aging equipment and upgrading production lines at its 650,000-square-foot manufacturing plant in Irvine, which makes intravenous solutions and bags for hospitals.
“We’ve been a sleeping giant in Orange County,” Pete Klaes, president and top local official at B. Braun, told the Business Journal.
The overhaul is part of a larger $1 billion company-wide reinvestment effort, which was unveiled in 2019, to help end America’s IV fluid shortage.
B. Braun also opened a new 218,000-square-foot facility in Daytona Beach, Florida, two years ago as part of the investment plan. The addition of a second facility brings B. Braun coast to coast and doubles its capacity for IV solutions, Klaes said.
B. Braun is a subsidiary of Germany’s B. Braun Melsungen AG and has its U.S. headquarters in Betlehem, Pennsylvania.
The parent company has $7.8 billion in yearly sales and 64,000 employees worldwide. It claims to be the largest privately held medical device company in the world.
The local unit has 2,000 employees, making it the third largest medical device maker in Orange County, according to the Business Journal’s annual list published in April. The Business Journal this week has a special report on healthcare that starts on page 11.
IV Shortage Caused by Hurricane Helene
Demand for the company’s products have increased due to IV shortages caused by Hurricane Helene, which flooded a Baxter International Inc. manufacturing facility that produces about 60% of IV fluids in the U.S.
To meet the demand, B. Braun locally hired 200 more employees and increased output by 20%. There are still over 100 roles open, primarily for material handling and inspection on the manufacturing lines, Klaes said.
Companywide, B. Braun makes products across 18 therapeutic areas, including regional anesthesia, nutrition and dialysis.
It’s best known for its infusion therapies, which are manufactured in Irvine.
“The products are mainly generics,” Klaes said. “The innovation is mainly in the container systems.”
One of the primary products it makes in OC is the Duplex Drug Delivery System, which has two chambers with pre-measured medication in one side and diluent in the other.
“It doesn’t have to be mixed at the pharmacy and saves time for nurses and practitioners,” Klaes said.
B. Braun touts itself as the only IV solutions provider with a full line of products free of PVC and DEHP.
DEHP is a phthalate used to soften PVC and plastics that are made into IV bags. The use of DEHP has been restricted in children’s toys due to evidence of harmful health effects from ingestion.
Klaes said that B. Braun has invested more than $1 billion in the U.S. to manufacture products without the use of phthalates.
“Everything we do in some way is associated with patient safety,” he said.
Former McGaw Medical Plant
The company’s Irvine plant opened in 1974 and was previously owned by IV bag maker McGaw Medical Inc.
B. Braun acquired McGaw, a subsidiary of Ivax Corp.—now part of Teva Pharmaceuticals—for about $320 million in 1997. Since then, B. Braun’s local base has run along McGaw Avenue, just off Jamboree Road.
In 2020, B. Braun also paid nearly $8 million for an adjacent 50,000-square-foot industrial building for its cephalosporin products.
B. Braun has remained a family-owned private company since its founding in 1839.
“Because of that, the focus is not on quarterly results, but in long term supply,” Klaes said.
Klaes, who has a background in mechanical engineering, received his MBA from Pepperdine University.
He has served as vice president and general manager of B. Braun’s Irvine site for the last eight years, and recently took on the role of president.
Early in his career, Klaes worked as an aerospace engineer at McDonnell Douglas Corp. before a project engineer role opened up at McGaw.
Klaes then rose to a managerial role and helped lead the Duplex project to launch in 2003 following the McGaw acquisition.
“I found to really enjoy it,” Klaes sad. “The work was always challenging.”
Sustainability Focus
Sustainability is a core value of the company, Klaes said.
B. Braun’s $500 million overhaul is also helping the company achieve its global goal of reducing its carbon emissions by half by 2030.
The company last year partnered with Bloom Energy to install fuel cells, which are currently supplying over 90% of electricity to the Irvine plant, according to Klaes.
He said the most challenging part about the installation was trying to avoid interruption of daily production during the IV shortages.
