Royal DSM and Sinochem’s anti-infective manufacturing and distribution JV in China has been given the green light by competition authorities.
The new unit, DSM Sinochem Pharmaceuticals, will be based in Hong Kong and employ around 2,000 people, including all staff from DSM’s anti-infectives unit which has production and customer service operations in Latin America, Europe, Egypt, India and China.
In a press statement the Dutch life science supply firm said that the JV, plans for which were announced in 2010 , is designed to capture "opportunities in China and other high growth economies’ by combining its production technologies with Sinochem’s local presence.
DSM spokesman Herman Betten told Outsourcing-pharma.com about the background to the deal, explaining that: “[In 2010] Sinochem took a 50 per cent equity interest in DSM Anti-Infectives, the business group of DSM that produces active pharmaceutical ingredients such as semi-synthetic penicillins and semi-synthetic cefalosporins.”
Beijing-headquartered Sinochem is a state-owned organisation involved in the distribution of chemicals to the pharmaceutical industry both in China and beyond through a 200-stong network of subsidiaries, including Sinochem International, Intmedic, SinoFert, Franshion Properties, GMG and Far East Horizon.
DSM’s global expansion plan
The new Hong Kong JV is part of the anti-infectives strategy that DSM set out in 2007 after it completed a review of its pharmaceutical ingredients manufacturing and supply business and deemed that the unit’s future lay in the formation of strategic partnerships.
The following December DSM signed the first of these deals – teaming up with Indian ingredient manufacturer Arch Pharmalabs in an agreement that focused on combining the Dutch firm’s industrial fermentation capabilities with Arch’s chemical conversion capabilities.
In 2009, DSM set up a manufacturing facility in Toansa, India for the production of Ampicillin using a newly developed enzymatic process that, it claimed, generates significantly lower amounts of waste as compared to the conventional processes.
The partnership with Sinochem also fits with what DSM Board member Stephen Tanda told Outsourcing-pharma.com in September last year when he said the firm will look for more strategic partners in Asia.