Teva to invest $100m in Hungary
manufacturing capacity in Hungary, as the pharma global spread
continues.
The money will be used to extend the capacity of a tableting plant that the company runs in Debrecen, eastern Hungary, after the government granted it a $12m incentive, the country's Economy Minister Csaba Kakosy announced. The expansion will create 415 new jobs after its planned completion in 2010, at which point the factory's output will grow to 15bn tablets per year. Hungary, where manufacturing cost base is relatively low, is the centre of Teva's European operations. The firm runs three manufacturing facilities there and sits in the top five pharmaceutical companies that are active in the country, where it has invested $630m in its operations since 1995. At its Hungarian sites Teva makes active pharmaceutical ingredients (API) and finished dosages in forms including tablets, capsules, injections, infusions, ophthalmics, soft gelatin capsules and ointments. However, Hungary is not the only region that the world's generics titan has an eye on - in January Teva said it has earmarked over $1bn to fuel an ambitious plan to broaden its presence in India. Over the next two years the firm is intending to use $250m-$300m to build new generic ingredients manufacturing facilities in the country. The first of these planned constructions is imminent, with company preparing to build a large API manufacturing facility on over 100 acres of land near Gwalior, Madhya Pradesh. Production capacity will be in line with Teva's large Indian competitors. Meanwhile, the remainder of the money will be used by Teva to fund the hopeful takeover of some Indian pharma businesses. Teva already has a presence in India through its Indian subsidiary, Teva India, in addition to a two year old R&D centre in New Delhi, however, the company is intent on broadening its activities in the country. Those in the business of generics market find India's low cost base a particular beacon, as margins in the industry become tighter and tighter and rock bottom production costs are key to remaining competitive. Meanwhile, in January Teva also made a significant investment in the biopharmaceuticals arena, buying up Human Genome Sciences' biotech spin-off, CoGenesys, for $400m to get its hands on the firm's broad-based biotech platform and innovative pipeline, with the aim of becoming a leading player in the biogenerics market. "Biopharmaceuticals will be a long-term growth driver for Teva, and this transaction represents an important spring-board in our efforts to establish ourselves among the leaders in this market," said Teva president and CEO Shlomo Yanai upon the announcement.
