Sumitomo gears up for contract manufacturing

- Last updated on GMT

Related tags: Contract manufacturing, Pharmacology, Active ingredient

Japan's Sumitomo Chemical is absorbing its wholly-owned Sumika Fine
Chemicals subsidiary and combining it with its own activities in
this area to bolster its role as a supplier of pharmaceutical
chemicals.

The internalisation is scheduled to complete by 1 July, 2004, and sets up Sumitomo to get into the contract manufacturing business for active pharmaceutical ingredients (APIs) and pharmaceutical intermediates.

In Japan, the revision of the Pharmaceutical Affairs Law goes into effect in April 2005, making it easier to contract out entire manufacturing. As a result, pharmaceutical companies are expected to accelerate outsourcing API and intermediate production, setting off fierce competition among contract manufacturers.

Sumitomo estimates that the worldwide pharmaceutical chemicals business represents a market of around $22 billion (€18.3bn), and centres on contract manufacturing. The contract manufacturing sector is on a rising trend, the company estimates, with the API and intermediates market forecast to grow 7 to 8 per cent annually as pharmaceutical companies themselves increasingly specialise in drug development and marketing.

Sumika was formed in 1992 by the consolidation of three Sumitomo Chemical subsidiaries: Yodogawa Chemical, Daiei Chemical, and Okayama Chemical, and specialises in fine chemical intermediates such as those for pharmaceuticals and dyestuffs, as well as rubber chemicals and photo and imaging chemicals.

Related topics: Markets & Regulations

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