The US-based contract manufacturer is initially splurging $25m (€18m) on a piece of land in Shanghai, and the cash will also cover the opening building phase of its first Chinese campus. The only detail left to iron out is the exact nature of the plot in Wuxi-New District Park (WND), located northwest of the city.
The amount of the investment should double in the next four years, Edward Roullard, SAFC's vice president of marketing, told journalists at the company's European press briefing in Geneva.
"This is our big move in China and it will give us access to low-cost manufacturing for our clients in Europe and in the US," said Rollard.
The main advantages for SAFC to build a site in China are both cost- and time-savings, he added.
"Building the same facility in Europe or in the US would cost SAFC twice the investment we have made with the Chinese site. In addition, the first phase of the Wuxi plant will be completed in nine months, versus two years if it had been built in a Western country," explained Roullard.
The site will be developed in three phases. The first phase includes a large-scale, non cGMP (current good manufacturing practice) manufacturing facility aimed at supporting SAFC's fine chemicals business unit, the company said. Construction is expected to kick off by the end of the year and should be completed by 2009.
When fully developed the site will produce raw materials, key intermediates and final products in support of SAFC's Pharma, Hitech and Supply Solutions businesses through a manufacturing plant, and analytical, packaging and warehousing facilities.
The development of the new China campus is another step in SAFC's "build and acquire" strategy which was set off to meet the increasing demand for its medicinal chemistry and cGMP manufacturing services.
The site complements its $12m Bangalore, India facility, which started production last October. The Indian plant supports customers with the manufacture of small-scale, key intermediates for medicinal chemistry.
SAFC, the contract manufacturing arm of the Sigma-Aldrich group, sees the Asia-Pacific region as one with high market opportunities and the company's sales have increased by 50 per cent this year.
Major pharmaceutical firms are fast investing and building their businesses in China, attracted by a highly skilled, low cost workforce and, of course, the enormous potential of the Chinese market.
As a result, the pharmaceutical industry in Asia is gearing up to be at the centre of the global market and most expect this shift to happen fast, a recent report showed.
According to a survey conducted by PricewaterhouseCoopers (PwC), more than half of big pharma companies believe the centre of gravity of the global pharmaceutical market will be in Asia rather than North America and Europe in the near future.
Asian countries and in particular China, India and Singapore are poised to become leading countries in the pharmaceutical space, the report said. Indeed, India and China have emerged as major suppliers of several bulk drugs, producing these at lower prices compared to producers worldwide.
