Lonza Boosts China Presence

Lonza wants to spend an additional $200 million in the southern Chinese city of Guangzhou to build plants producing pharmaceutical ingredients.

The announcement was made during the inauguration of the larger of the Swiss company's two research and development centers in the city. Accommodating 60 scientists, this new lab conducts R&D of active pharmaceutical ingredients (APIs) and intermediates for Lonza's custom synthesis business. A smaller R&D outfit started operating in late 2004 (C&EN, Dec. 13, 2004, page 12).

Lonza says it has signed a letter of intent to erect a multipurpose plant within five years that will make APIs and a complex producing high-grade pharmaceutical intermediates. The facilities will be able to operate at both pilot scale and commercial scale.

China is emerging as the major source of raw materials for the pharmaceutical industry. Christian Dowdeswell, technical marketing director in Europe for India's Dishman Pharmaceuticals & Chemicals, notes that making one's own intermediates in China ensures more reliable supplies than depending on external suppliers. Moreover, it allows a company to benefit from the low cost of operating in China while also being able to guarantee customers that the quality of pharmaceutical ingredients is maintained.

Dishman expects to begin construction of its own drug intermediates plant in Shanghai "within a few weeks" and to start production by the end of the year, Dowdeswell says.

Lonza's initial $30 million investment in Guangzhou was in a niacinamide (vitamin B-3) facility that has been producing since 1999 (C&EN, Oct. 25, 1999, page 24). With most operations in Guangzhou, the firm now employs 380 people in China.