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SAFC outlines Asia strategy; plans to expand manufacturing footprint

By Gareth Macdonald, 07-Jul-2010

Related topics: Excipients, raw materials and intermediates, APIs (active pharmaceutical ingredients), Ingredients, Globalisation

The rapidly evolving Asian drug manufacturing sector represents both an opportunity and a challenge for the fine chemicals and molecules industry, according to SAFC president Gilles Cottier.

Speaking to in-Pharmatechnologist at an SAFC presentation in Chicago, Cottier set out the plan for Asia, explaining that having built its sales and distribution network “what we need to do [now] is selectively increase of manufacturing footprint.”

However, while capacity expansion in the region is clearly on the SAFC agenda, the firm’s market strategy will be to compete with local manufacturers on product quality rather than just on price.

Cottier explained that: “[Although] we want to be cost competitive to ensure we are not priced out of the market…our differentiation will not be price driven because I don’t think we will be able to win.”

He went on to say that companies which fail to recognise the need to emphasise the quality of their products as a differentiation strategy are likely to struggle in the region’s ultracompetitive marketplace.

New opportunities

Rather than dwelling on the threat of lower cost competition, SAFC is instead focusing on the market opportunities available in Asia, particularly the emergence of new consumers for its products and services.

Cottier said that: “We’ve seen double digit growth in these markets for the last ten years and [we believe] they are going to grow even faster” citing the rapid growth of the Chinese and Indian pharmaceutical markets’ as examples.

This rate of expansion, he continued, presents tremendous opportunities for SAFC’s life science research businesses as both Big Parma firms cal players seek to develop more products for these growing markets.

Sourcing advantages

The other main benefit that Cottier sees with the growth of the drug sector in Asia is the material sourcing opportunities suppliers in the region provide.

We need to take advantage of the [low] cost base in these countries and that’s why, over the past five years, SAFC has developed teams dedicated to sourcing services and products in Asia, particularly in India and China..”