Chemicals firm Lonza has vowed to spend $200m (€160m) over the next few years to expand in southern China, further limiting its dependence on external suppliers of intermediates and active pharmaceutical ingredients (APIs).
The Swiss contract manufacturer already has a ten-year presence in the region, with manufacturing facilities in Guangzhou and Liyang, but China's low operating costs and expertise in raw materials for the pharmaceutical industry are proving more and more attractive for Lonza.
The company has now signed a letter of intent with authorities in Guangzhou Nansha to build, over a three to five year period, a multipurpose API and International Standards Organization (ISO) regulated intermediate plant complex which delivers large scale and pilot scale production capabilities.
"This project will mark another important milestone in Lonza's long-term strategic plan and it is a key element in achieving the targeted growth for Lonza," Lonza CEO Stefan Borgas said.
"Since 1995, Lonza has selected Guangzhou City to be its investment front in China and we firmly believe that this region offers cutting-edge technology platforms, manufacturing excellence, and a competitive cost environment which complements Lonza's other international sites."
Worldwide the company is reported to have 26 projects underway involving new intermediaries for applications in a number of industries and a further 13 projects looking to improve existing products and develop new technologies.
Lonza currently produces a significant share of the global market of Niacinamide (vitamin B3) in its two operations in Guangzhou City.
With the majority of its operations in Guangzhou, the firm boasts 380 people in its payroll in China.
Lonza also has an R&D Center located in the Nansha Development Zone which participates in developmental activities for intermediates and active ingredients for the pharmaceutical and fine chemical industries globally.
In September the company boosted its ability to make APIs at its Visp site in Switzerland in response to what it called were "ever increasing hygienic and regulatory requirements."