Fuji Pharma jumps into CMO game with $53.4M plant buy

Fuji Pharma has bought its way into the CMO world, picking up DKSH's API-producing Thailand plant for $53.4 million.

Switzerland's DKSH is a market-expansion-services company, specializing in helping companies tap into the Asian market. The company had manufactured APIs for pharmas, including Fuji, at its Olic plant but has decided to cash out and hand the facility over to someone better suited to profit off it.

That's where Fuji comes in. The Japanese drugmaker has been looking to expand outside its home country, and it will inherit all of DKSH's CMO customers. The Thai plant manufactures more than 550 products for about 35 pharmaceutical and healthcare companies, FiercePharmaManufacturing reports. The facility brought in about $37.8 million last year, according to DKSH, and Fuji intends to keep the plant's more than 850 employees.

Fuji Pharma CEO Hirofumi Imai said the plant buy is an ideal way for the company to spread its business beyond Japanese borders. "Olic fits perfectly with our existing operations in Japan and in Asia, and we are committed to investing and growing Olic even more and further enhancing its already well-established reputation and performance," he said.

And Fuji's not the only player eyeing lucrative opportunities in the Asian CMO market. GBI Research estimates the CMO business will reach $59.9 billion worldwide, more than doubling its 2010 total of $26 billion. The main motivator: Pharmas looking to cut costs by minimizing their manufacturing spending. Asian CMOs will be well-positioned to undercut competitors thanks to cheap labor and a more lax regulatory environment.

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