Samsung Biologics hopes localizing products will be a win-win for all

Industry

Published: 17 Oct. 2022, 04:00 Updated: 24 Oct. 2022, 18:08

Samsung Biologics hopes localizing products will be a win-win for all

Samsung Electronics Vice Chairman Lee Jae-yong examines Samsung Biologics' fourth plant in Songdo, Incheon, on Oct. 11. [SAMSUNG ELECTRONICS]

The Covid-19 pandemic has taught major Korean manufacturers how important localizing materials and equipment is. Sudden shutdowns of factories abroad left companies helpless, in particular biopharmaceutical manufacturers that must complete their client orders by requested dates.

Producing essential materials at home is one of Samsung Biologics’ priorities, and its fourth plant in Songdo, Incheon, shows how hard the company is trying to localize equipment and by doing so, support the growth of smaller firms.

Samsung Biologics said it used 11 types of domestically produced equipment and materials to build the fourth contract manufacturing and development organization (CDMO) plant including cell incubators, pipes, filters and incubator cleaners. That is over double the number of those used in the third plant.

In terms of cost, the company spent 10 times more on buying equipment from local companies for the fourth plant compared to the third plant, though specific details are classified.

The fourth plant, which started partial operations earlier in the week, is the world’s largest single biopharmaceutical plant with 240,000 liters of capacity.

“The reason why we are focused on localizing equipment is to create a win-win strategy,” said a spokesperson for Samsung Biologics. “We can receive materials more quickly and respond to clients’ requests more timely.”

“Partner companies can raise their technical skills by supplying their parts to us and take this as an opportunity to enter overseas markets.”

Korean biopharmaceutical companies on average import 90 percent of the equipment from overseas when building a plant, according to data from the Korea Biotechnology Industry Organization.

The Songdo, Incheon-based company teamed up with local parts equipment maker Junghyun Plant to co-develop a cell incubator for its fourth plant. The two companies signed a memorandum of understanding in 2020.

A cell incubator is a core piece of equipment in the manufacturing of biopharmaceuticals as it is used to proliferate cells. It is the first time a local company succeeded in developing an incubator in Korean history.

Samsung Biologics offered some financial aid and its know-how to support Junghyun Plant to develop the incubator. It even offered some parts for free, the company said.

But Junghyun Plant was not the first time Samsung cooperated with a smaller firm to localize products.

Samsung Biologics in 2016 inked a contract with BiOCS, an Incheon-based manufacturer of detergents and disinfectants for biopharmaceuticals. The two companies cooperated to develop a cleaner for incubators, which was used in Samsung's third plant.

BiOCS has been supplying the product to various other companies including Hanmi Pharmaceutical and Celltrion, and even some foreign companies.

“We will endeavor to increase the use of localized products in the future,” Samsung Biologics said.

Once the fourth plant is running at full force in 2023, it is expected to increase its total production capacity to 620,000 liters, which Samsung says is the equivalent to nearly 30 percent of the global contract manufacturing capacity for biopharmaceuticals, beating Germany's Boehringer Ingelheim and Switzerland's Lonza.

Samsung Electronics Vice Chairman Lee Jae-yong promised to invest another 7.5 trillion won ($5.3 billion) in Samsung Biologics to build four more plants in Songdo.

Samsung Biologics has major global companies as its customers — AstraZeneca, Moderna, GlaxoSmithKline, Pfizer and Eli Lilly.

BY SARAH CHEA [chea.sarah@joongang.co.kr]