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Nycomed plans ?75m Russian plant; may up ?4.5bn bid for Solvay
Late last week Swiss drugmaker Solvay confirmed its plan to invest up to $75m (€51m) to build a new manufacturing plant in Yaroslavl, Russia.
Nycomed, which generates 10 per cent of its annual turnover from pharmaceutical sales in Russia, said that the facility will make sterile liquid products and tablets for the country’s drug market, including Cardiomagnyl, Actovegin, Calcium and Warfarin.
The plant, first mooted in July , meets with current good manufacturing practice (cGMP) standards and will employ around 150 people when it becomes fully operation in 2014.
CEO Hakan Bjorklund said that: “Russia-CIS is an important cornerstone in our growth strategy, and optimally serving this market is vital for Nycomed” and added “the investment underlines our belief in [its] long-term prospects.”
Senior VP Jostein Davidsen agreed about the importance of the Russia market to Nycomed, explaining that the firm had look at a number of locations before selecting the site.
Davidsen said that: “A key factor in our decision was the long-term availability of a qualified workforce, where the medical academy in Yaroslavl plays an important role,” adding that “we are confident that we made the right choice.”
Russia’s pharmaceutical market
Nycomed’s contention fits about the strength of the Russian market with the findings of an Espicom report released in June.
The analysts revealed that drug sales in Russia generated $11bn (?7.5bn) in 2008 and predicted that the market will expand at a rate of 17 per cent a year, reaching a value of $22bn by 2013.
Espicom also said that 74 per cent of all pharmaceutical sold in Russia are imported, which suggests that current manufacturing capacity in the country is not able to keep up with growing demand and further supports Nycomed’s decision to expand.
Additionally the new facility, coupled with Nycomed’s existing strength in the Russian market, should serve it well as it competes with firms like Gedeon Richter, Krka and Lek which are all active in the country.
May bid more for Solvay
In other Nycomed news, reports have emerged that the Swiss firm is considering upping its EUR4bn bid for Solvay’s pharmaceutical unit.
The Wall Street Journal said that Solvay’s board will meet to discuss a potential EUR4.5bn offer after Abbott Laboratories and chemicals firm UCB are considering making a rival bid for Solvay’s unit