Samsung Biologics to invest $1.5 bn for 5th CDMO factory

Samsung Biologics Co. is slated to inject 2 trillion won ($1.5 billion) to build its fifth plant in South Korea. It will be a fast follow-up investment as the construction of its fourth plant, the world's largest single biomanufacturing facility, is in full swing.

The biotech unit of Samsung Group is set to confirm the new factory construction plan at its March 17 board meeting, according to sources on Thursday.

The new plant will sit on the second bio campus in the free economic zone in Songdo, Incheon, west of Seoul. Samsung Biologics announced last July that it will pour 7.5 trillion won to create the campus by 2032.

The fifth factory, with an annual production capacity of 180,000 liters, will be the first plant to be constructed on the second bio campus. 

The yearly capacity is similar to that of the third plant on the first campus. While the third factory cost 850 billion won for construction, the new plant needs a larger investment as it will be set up on a greenfield, sources said.

FIERCER COMPETITION IN GLOBAL CDMOs

Samsung Biologics' aggressive expansion of the production facilities aims to solidify its leadership in the global contract development and manufacturing organization (CDMO) market. CDMOs develop and produce drugs for the biopharmaceutical firms they partner with.

The Korean biotech is a rival to two global CDMO powerhouses, Switzerland’s Lonza Group AG and Germany’s Boehringer Ingelheim Group. 

As of 2020, only these three firms have more than 300,000 liters of annual biopharmaceutical production capacity  – China’s Wuxi Biologics and Japan’s Fujifilm are catching up with huge investments.

Samsung Biologics’ total manufacturing capacity will reach nearly 800,000 liters per year once the fifth plant begins full operation.

Last October, it started operating 60,000-liter production of the total 250,000-liter manufacturing capacity at the fourth plant. The company plans to begin full operation of the 2 trillion won factory later this year. 

Its first, second and third plants have a combined yearly production capacity of 364,000 liters. As of end-2022, the drugmaker’s order backlog amounts to $5.1 billion.

The global CDMO market is steadily increasing, despite intensifying competition for production expansion. In particular, antibody drug manufacturing, which Samsung Biologics focuses on, is seeing growing demand. 

The biotech is diversifying its business portfolios in next-generation antibody platforms. It launched S-dual last September, a high-yield bispecific antibody platform that ensures high binding affinity among chains for better manufacturability. The company is also considering producing antibody-drug conjugates.

*Updated with the investment amount

Write to Jae-Young Han at jyhan@hankyung.com

Jihyun Kim edited this article.