Bayer aims for 40% more output at Beijing production site with new $59M plant

Bayer's Chinese unit plans to use the new plant to deliver a stable supply of commonly used drugs. (Bayer)

Back in 2016, Bayer's Beijing supply center became the largest drug packaging site in the company's entire global production network. Now, the German drugmaker is revving up its Chinese operations yet again, this time with a plant expansion that aims to tap into a nationwide public health initiative. 

Bayer kicked off construction of a new production and supply facility at the Beijing Economic-Technological Development Area Wednesday, pegged to boost yearly output in Beijing by roughly 40%. 

Set to come online in late 2022, the €50 million ($59 million) plant will complement Bayer's existing operations in Beijing, adding more production space and a technical area equipped with high-speed production lines and an accompanying logistics system, a Bayer spokesperson said in an email. The plant is expected to add over 80 jobs at the site, the spokesperson added.  

Bayer will use the plant to build up supplies of cardiovascular and diabetes meds, among others, for the China market—drugs the company has produced at its Beijing site since it first set up shop there in 1995. 

"Cardiovascular diseases and diabetes remain among major chronic diseases which are prioritized by the Chinese central government in its “Healthy China Action Plan 2019 -2030” in efforts to address major health challenges caused by the prevalence of chronic diseases," the Bayer spokesperson said. "This project is designated to increase the production capacity and accelerate the implementation of innovative digital solutions at the Beijing site, aiming to ensure a reliable supply of high-quality drugs for more Chinese patients suffering from chronic diseases."

RELATED: Bayer plays the long game with plans to double workforce at Berkeley biologics site

The Chinese government last July unveiled a plan of attack for its "Healthy China 2030" blueprint, designed to improve public health through a range of actions like broader insurance coverage and access to affordable drugs.

The Chinese government has also pledged to follow a swifter and more transparent drug approval process. The "Healthy China 2030" initiative has spawned an investigative new drug (IND) program with an abbreviated, 60-day trial application process, plus an orphan drug system, and it has allowed ex-Chinese firms to submit foreign clinical trial data—all opportunities to bring innovative medicines to the Chinese market, Bayer says. 

Bayer's been betting big on its Chinese business for the better half of a decade now. In 2014, the German drugmaker announced a $138 million investment to expand packaging and logistics at its Beijing site—the very cash infusion that would make it "the largest pharmaceuticals packaging site in Bayer HealthCare's global production network," according to then-CEO of Bayer HealthCare, Olivier Brandicourt. 

RELATED: Bayer fires employee for breaking coronavirus quarantine rule in China

Two years on, the company started work at a 1.4 billion yuan ($213 million) plant in Majinpu in China's Yunan province, which Bayer picked up when it acquired Chinese herbal and over-the-counter (OTC) specialist Dihon in 2014. The plant produces OTC drugs and traditional Chinese medicines (TCM).

Bayer isn't the only drugmaker jockeying for growth in China—it's not even the only Germany-based drugmaker, for that matter.

In 2016, Germany's Merck KGaA opened the doors to a $188 million facility in Nantong, Jiangsu Province, China, meant to produce meds from the country's Essential Drugs List. Hard on the heels of the site's inauguration, Merck invested $88 million more into a Life Science Center near the Nantong site.

Meanwhile, Swiss CDMO Lonza bought one of GE Healthcare’s off-the-shelf Chinese biologics factories in 2018, joining a slate of other companies to set up biologics plants in the country, including JHL Biotech and Boehringer Ingelheim.

This story was updated with comments from Bayer.