CMOs in India, China to Grow at 20 Percent

The economic pressures of the past 18 months have clearly accelerated the cost reduction efforts of the pharmaceutical industry. Switzerland-based Lonza Group, a major contract manufacturing organization announced in January 2010 that it is closing three of its manufacturing sites located in the US, UK and Canada and strengthening its platform in Asia. This step complements Lonza’s existing platform in Nansha (China) and is the response to customer needs for mature regulated products at competitive conditions in a new market segment. Lonza said that all three sites will be closed in 2010 and the closure were part of its intention to adjust the organization to the more volatile market environment, to reduce fixed cost in the next 18-24 months and to review the detailed business unit strategies.

Similarly, DSM Speciality Intermediates (DSI) too announced its intention to close by the end of 2010, with activities at its production site in Sittard-Geleen, the Netherlands ceasing in July 2010, in response to pricing pressures caused by the rise of rivals in India and China. DSI acknowledged the threat posed by competitors in emerging markets like India and China in 2007 when it closed a number of production plants and integrated the remaining facilities with other DSM sites. This was intended to improve the fortunes of the company but it has found it to be impossible to make DSI structurally profitable, even after these measures.

The low production costs in emerging markets such as India and China have made it increasingly difficult for European companies to compete. This has led some companies like Lonza and DSM, to shift focus on Asia as manufacturing base. This is not restricted to contract manufacturers alone. ... more text ... Notice: The copyright of this article is owned by another publisher, please visit the following website link for the full text of the article. The full access to the article is under the control of its publisher. Viewers who cannot access the article online can contact us at croasia@croasia.net for further information. Click here to access the full article. By clicking on the above link, you will leave CROAsia.net. If you wish to return to this website, please click "Back" button or log onto CROAsia.net again.

... more text ...

Notice: The copyright of this article is owned by another publisher, please visit the following website link for the full text of the article. The full access to the article is under the control of its publisher. Viewers who cannot access the article online can contact us at croasia@croasia.net for further information.

Click here to access the full article.

By clicking on the above link, you will leave CROAsia.net. If you wish to return to this website, please click "Back" button or log onto CROAsia.net again.