Samsung Biologics to double CDMO capacity with new plants worth $5.3 bn

Samsung Biologics Co., the world’s largest contract drugmaker, plans to double its manufacturing capacity by building four additional plants worth 7 trillion won ($5.3 billion) to solidify its leadership in the contract development and manufacturing organization (CDMO) market.

The biotechnology unit of South Korea’s top business group Samsung said on Monday it has signed a 426 billion won land purchase contract to build its second bio campus inside the free economic zone in Songdo, Incheon, west of Seoul.

The company said it will build four new plants on its second bio campus on 357,366 square meters of land near its first campus, which accommodates four factories.

The construction of the four new plants will be completed by 2032, which is expected to create a total of 4,000 jobs by then. The new site is about 30% larger than the nearby first campus.

Currently, the company operates three plants and a fourth on the first campus is under construction. Set to be completed by the end of next year, the fourth plant has a production capacity of 256,000 liters, the world’s largest for a single plant.

The four new plants on the second campus will likely have a combined capacity of 1 million liters, much larger than the 620,000 liters for the four factories on the first campus.

In terms of capacity, Samsung Biologics is already the world’s largest contract manufacturer, known as a contract manufacturing organization (CMO) company, followed by Swiss rival Lonza AG, which has a capacity of 303,000 liters, and Germany’s Boehringer Ingelheim (275,000 liters).

With expanded facilities, Samsung said it aims to strengthen its capabilities as a CDMO company to develop novel therapeutics.

“Since the onset of the COVID-19 pandemic, the development of vaccine and treatment drugs has become one of top priorities for biotechnology firms across the globe. Through the economies of scale, we want to cement our global No. 1 position,” said a Samsung Biologics official.

NOVARTIS, SAMSUNG’S LATEST CMO CLIENT

The four plants on its first campus already account for about 30% of the world’s total CMO capacity.

Samsung has been ramping up its facilities to meet growing demand from pharmaceutical companies.

Most biopharmaceutical companies such as Pfizer, Moderna, AstraZeneca and Johnson & Johnson’s pharmaceutical division Janssen focus only on research and development. They do not have their own production facilities, outsourcing production to contract drugmakers.

Korea is home to the world’s leading contract drug manufacturers, including Samsung Biologics.

The Songdo bio-cluster houses about 80 companies, including Celltrion Inc., and 10 research institutes, boasting a combined biopharmaceutical production capacity of 880,000 liters, the world’s largest.

Samsung Biologics has clinched six CMO contracts worth a combined 764.1 billion won so far this year.

Last month, the company added Novartis International AG, a Swiss-American multinational pharmaceutical firm, as its new CMO client. Samsung Biologics said it serves more than half the world’s top 10 drugmakers as their contract drugmaker.

Write to Jeong-Min Nam at peux@hankyung.com
In-Soo Nam edited this article.