With the $53 million sale of its plant in Thailand, DKSH can gracefully exit the drug manufacturing business and buyer Fuji Pharma can establish a presence in that country.
The Zurich-based DKSH is a market expansion services firm that provides everything from market research to product delivery to companies that want to expand into Asia. It has been manufacturing APIs for clients, including Fuji, as part of the services but has decided it doesn't have enough expertise in that realm to keep at it.
The Olic division plant "is more optimally positioned in the hands of Fuji, which has significant expertise in this sector. DKSH will be investing the proceeds into our core business to create higher value for shareholders," CEO Dr. Joerg Wolle says in a release. DKSH's pharmaceutical business has had double digit growth for 5 years, Charles Toomey, DKSH executive vice president for healthcare, tells the Bangkok Post. But with the plant's revenue hitting 1 billion Thai baht ($37.8 million) last year, it still made up less than 2% of the company's total revenue.
At the same time, the acquisition fits nicely with Fuji's expansion plans outside Japan, its CEO, Hirofumi Imai, says. Fuji has valued the deal at 1.68 billion baht ($53.4 million) and expects to complete it by Oct. 1, the Bangkok Post reports. The plant's more than 850 employees are expected to remain and Fuji will take over the plant's current customer base, DKSH says. The plant makes more than 550 products for more than 35 pharmaceutical and healthcare companies and for confectioner and supplement makers.
Asia is seen as having huge potential for drugmakers and especially contract manufacturing organizations as drug companies look for cheaper ways to expand there. GBI Research recently forecast revenues for the CMO business, propelled to a large extent by expansion in Asia, will hit $59.9 billion in 2018, more than double its 2010 revenues.
- read the Bangkok Post story
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