Japan picking up on manufacturing outsourcing trend

By Kirsty Barnes

- Last updated on GMT

Related tags Pharmacology Japan

Japan's market for contract manufacturing activities is predicted
to double by 2009 as the outsourcing trend begins to take off in
the country.

Most pharma firms in Western countries are already taking at least some advantage of the cost-benefits that outsourcing can bring to drug manufacturing and Japan has been showing signs of late that it does not want to be left out.

As of 2004 the country held 11 per cent of the world's pharmaceutical market, trailing only second to the US, and so the outsourcing opportunities will be vast.

The movement is being created by recent changes in government policies that are now encouraging domestic pharma companies to explore cost-cutting options in order to stave off competition from foreign firms who have long engaged in the practice.

Foreign investment in this sector is also on the rise, buoyed by favourable policies that, among other things, encourage companies to buy over local partners through stock swaps, said a recent report from Research and Markets titled "Japanese Pharmaceutical Industry: An Analysis".

In July, the Japanese pharmaceutical industry indicated that it was particularly eyeing India as a new hub to conduct its contract manufacturing and clinical trials - a region where much of the pharma outsourcing is now directed.

Leading the charge is Japan's department of Foreign Affairs and the department of Economy, Trade and Industry, along with two of Japan's chemical heavies, Eisai Chemicals and Mitsubishi Chemicals.

Eisai Chemicals expressed its intention to set up a new manufacturing unit and R&D facility in India, at either Vishakhapatnam or Indore, while Mitsubishi Chemicals announced a Rs1665 crore (€285.1m) plan to expand the manufacturing capacity of purified teraphthalic acid (pta) - a petrochemical used in plastic products - from 470,000 tonnes to 1, 270,000 tonnes at its facility in Haldia.

Related topics Contract Manufacturing & Logistics

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