Merck KGaA zeroes in on regional manufacturing in Asia as it grows South Korean footprint

Merck KGaA is looking to further boost its capacity in South Korea as biopharma companies eye to localize production and tighten their supply chains in the Asia-Pacific region.

Ivan Donzelot

“We go where our customers are going… APAC is now the place where we need to develop local capabilities so that we are less sensitive to all geopolitical tensions that may arise,” said Ivan Donzelot, Merck KGaA’s head of integrated supply chain operations.

“The pharma industry is clearly moving from a very global network to a more regionalized and local network,” Donzelot told Endpoints News in an Interview.

On March 20, Merck KGaA announced its life science arm MilliporeSigma is pouring at least €300 million ($328 million) into a new biologics facility in South Korea, which, according to Donzelot, would be the German company’s largest life science investment in APAC so far. The new site will create 300 new jobs by the end of 2028.

And Merck KGaA is looking to further invest in South Korea, Donzelot added. The country has been emerging over the past few years as a new hub for biologics and it has the ambition to become the number one in that field, he explained. Currently, the company has 13 R&D and production sites in South Korea.

South Korean CDMOs like Lotte Biologics and Celltrion are also building out their local footprint. Samsung Biologics is also expanding and has been pegged as the local CDMO that could absorb some of WuXi’s business if the Biosecure Act passes.

While situations can change, Donzelot noted Merck KGaA is unlikely to be working with South Korean third-party manufacturers any time soon. “We want to remain very integrated. So we want to develop our own capabilities,” he added.

Other biopharma companies are also looking to regionalize their supply chains. For instance, AstraZeneca’s CEO Pascal Soriot said it is making plans to independently supply its medicines to China, which would separate it from US and European supply.

Merck KGaA is also developing capabilities in India and China. In India, the German company already has six manufacturing and R&D sites. It has made multiple investments in China, such as building out its collaboration center in Shanghai.

On Biosecure, Donzelot said Merck KGaA should be “ready to face whatever is coming. That’s at least what I try to do with my team – really remain very informed and react as early as possible.”

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