Roche to invest $465M in new plant in China

Roland Diggelmann, COO of Roche Diagnostics

While other drugmakers have been putting up drug manufacturing facilities left and right in China, Roche ($RHHBY) has been more conservative in its approach there. Now it will invest significantly to build a manufacturing facility to make lab tests.

The Swiss drugmaker this week said it would spend about 450 million Swiss francs ($465 million) to build a manufacturing facility in Suzhou, China. When completed in 2018, it expects to have 600 people working there. It is slated to eventually manufacture immunochemistry and clinical chemistry tests, but the first phase will be for packaging.

"We are confident that by establishing our manufacturing footprint here in Suzhou close to our China operations, we can further increase our market responsiveness and contribute to the overall competitiveness of our business," Roland Diggelmann, COO of Roche Diagnostics, said in a statement. Roche has a 20-year manufacturing partnership in China, Shanghai Roche Pharmaceuticals, with partner Sunve Pharmaceuticals of Shanghai, China. Roche says it produces about 15 products there.

Lots of Western drugmakers are building facilities in rapidly growing China. In March, Bayer announced a €100 million ($127 million) investment in its Beijing manufacturing plant to boost production of cardio and diabetes drugs. Merck KGaA started work in September on a new €80 million ($102 million) plant in Nantong that it says will be its largest outside of Europe. It will produce meds on China's Essential Drug List. Johnson & Johnson ($JNJ), AbbVie ($ABBV) and Sanofi ($SNY) also have projects underway.

- here's the Roche announcement