Walgreens drug stores said Tuesday it will build a $150 million distribution center near Anderson that will employ 450 people when it opens in 2007, the largest business expansion in South Carolina in 14 months.

The Chicago-based retailer’s decision breaks a string of major job losses in the last year, from General Electric’s layoff of 1,200 in Greenville to the 500 jobs lost with Georgetown Steel’s closing on the coast.

Walgreens also is following the state’s rising population, the same demographic wave that led Target discount stores last year to open a 1.3 million-square-foot distribution center in Kershaw County that employs about 700 people.

The Anderson County facility will be smaller, at least initially. The company will begin building a 700,000 square-foot facility this summer along Interstate 85 at S.C. 81. Hiring will start several months before it opens in 2007.

John Lummus, director of Anderson County’s economic development office, said the investment is among the largest ever in Anderson County, but the biggest benefits will come with the new jobs. It had a 6.1 percent unemployment rate in November, below the state average of 6.9 percent.

Lummus and company officials would not say how much Walgreens will pay its workers, but many state incentives require the company’s average pay to be above the county’s average, now $12.43 per hour in Anderson County.

For Gov. Mark Sanford, Walgreens’ plans mark the state’s largest new or expanding business announcement since he took office a year ago. The last announcement bigger than Walgreens’ was the 400-job, $400 million expansion BMW announced in September 2002.

On Tuesday, Sanford said Walgreens’ facility will be a significant boost to the state’s economy.

“This is precisely the kind of success story we’re looking to repeat again and again throughout South Carolina,” he said.

For Walgreens, the distribution center will be needed to support its recent invasion of the Southeast with new stores.

The center will serve stores in all of the Carolinas, Georgia, Alabama and Mississippi, and parts of Virginia, Louisiana and Tennessee.

The states to be served exclusively by the Anderson distribution center account for only 5 percent of Walgreens’ 4,291 stores nationwide.

This will change, said Walgreens spokesman Michael Polzin. Of the 450 stores to open this year, a larger portion will go to the Southeast.

“We really didn’t have much presence there five to 10 years ago,” he said.

South Carolina has 25 Walgreens but will have about a dozen more by the end of the year, he said.

If you see one Walgreens, expect to see more.

Its expansion strategy is to build densely in the markets it serves, stretching its advertising dollars and cutting distribution costs. Plus, Polzin said, “People don’t want to drive more than two miles to get to a drug store.”

And they don’t count the competition in that mileage. In Greenville, a new Walgreens opened recently across from one of the town’s largest CVS stores.

“When we go into a market, we want to be eventually the No. 1 or No. 2 (pharmacy) store in the market,” he said.

Reach DuPlessis at (803) 771-8305 or jduplessis@thestate.com.