Chinese Firm Buys Former Boehringer Ingelheim Plant | November 10, 2014 Issue - Vol. 92 Issue 45 | Chemical & Engineering News
Volume 92 Issue 45 | p. 6 | News of The Week
Issue Date: November 10, 2014

Chinese Firm Buys Former Boehringer Ingelheim Plant

Pharma Chemicals: Deal could be first of several U.S. acquisitions by Chinese drug firms
Department: Business
Keywords: China, Virginia, pharmaceuticals, API, M&A, layoffs
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UniTao CEO Tao Ye (left) shakes hands with Virginia Gov. Terry McAuliffe.
Credit: Virginia Economic Development Partnership
UniTao CEO Tao Ye (left) shakes hands with Virginia Governor Terry McAuliffe.
 
UniTao CEO Tao Ye (left) shakes hands with Virginia Gov. Terry McAuliffe.
Credit: Virginia Economic Development Partnership

An obscure Chinese drug company has acquired a chemical plant in Petersburg, Va., that Boehringer Ingelheim had intended to close by the end of the year. The firm, UniTao Pharmaceuticals, says it will spend $22.5 million to take over the active pharmaceutical ingredients (APIs) facility and upgrade it.

When Boehringer announced the closure in 2013, it said 240 employees would lose their jobs by the end of this year. They may now find work with UniTao. “Former Boehringer Ingelheim employees, because of their proven skills and experience at the plant, are certainly first in line for opportunities as they become available,” says UniTao spokesman Christian Munson. The plant may employ as many as 376 people in three years, he adds.

UniTao is a unit of Shanghai Tenry Pharmaceutical, which was formed in 2005, according to Virginia officials. Drug industry sources contacted by C&EN in China were only vaguely aware of Tenry, but James Bruno, president of the consulting firm Chemical & Pharmaceutical Solutions, says it is not unusual for API makers to operate “under the radar” in China.

Bruno says the deal is the first that he is aware of in which a Chinese API producer has acquired assets in the U.S. “But I would not be surprised if we see one or two more by the end of the year,” he adds.

Lee Kang, president of P&AC, a U.S. marketing advisory firm that has done work for Tenry, says the Chinese company has about 500 employees and makes APIs and finished-dosage drugs. Tenry plans to do the same in Virginia, according to Kang, and sell its output in the U.S., China, and elsewhere. “Made in the U.S.A. is a trend” in China, he says.

Although costs and regulations are on the rise in China, Chinese companies moving to the U.S. will face a raft of new challenges in environmental management, occupational health and safety, and other areas, cautions Howard J. Foote, CEO of the consulting firm Biotex Data. For Tenry, hiring former plant employees will help with this challenge, he adds.

 
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