Takeda plans to dominate thriving Russian pharma market, starting with a new plant

By Natalie Morrison

- Last updated on GMT

Takeda opens Russian pharma manufacturing facility

Related tags Russia

Takeda has opened a new $96m (€75m) pharma facility in Russia as part of its bid to “outgrow” the already thriving local market.

The 79,000 sq ft in Yaroslavl will be capable of both solid dose production – from weighing and mixing, to compression, coating, and packaging – as well as liquid sterile production such as solution preparation, sterilisation, filling and packaging.

When the plant is up to full production, expected in 2014, the firm says it will produce around 90m sterile ampoules and over two billion tablets per year. Initially, it will produce generics including cardiomagnyl, actovegin and calcium tablets to meet “Russian demand”.

The plant is the Japanese firm’s first new establishment in the area - it has existing operations following its recent Nycomed takeover​ - however according to CEO Yasuchika Hasegawa it is just early days for Takeda in its bid to dominate the Russian market. The Yaroslavl facility already makes it the seventh largest drug producer in the country, with 2012's revenues projected at €620m. 

Tobias Cottmann, senior director of external communications told in-PharmaTechnologist.com: "The plant has a solid business case, which is based on the high demand for the company’s biggest products in Russia. It will allow it to better serve the Russian market through local production and demonstrates Takeda’s strategic, long-term commitment to the Middle East and Russia."

Grwoth in emerging markets

As for the firm's next steps, Cottmann told us it is on the lookout for "bolt-on"​ purchases especially in emerging markets.

"We are open to complementary, bolt-on opportunities that make strategic sense, focusing on emerging markets such as our recent acquisition of Multilab in Brazil," he said, adding that Takeda will not look for any more big "Nycomed"​ sized deals at this time.

But though all emerging markets - which make up around 13 per cent of total sales, boosted significantly since Nycomed joined the portfolio – are of interest to the company, Cottman maintained that Russia will be the key focus and that the firm plans to beat growth estimates for the pharma production industry in the region.

In a statement, the firm quoted an IMS Health report which marked a $14.7bn Russian pharma market in 2011, and predicted an 11 per cent growth annually up until 2016. The statement said: “Takeda plans to outstrip that with annual growth of 15 per cent over the same period.”

Hasegawa added: "Russia is our largest emerging market in terms of revenues, and is expected to contribute significantly to our growth over the next few years. The Yaroslavl facility will enable us to provide locally produced pharmaceutical products to patients and clinicians, as well as bringing significant benefits to the Yaroslavl and Russian economy."

Are Big Pharma Russia bound?

Takeda is said to be the first major player to set up big operations in Russia. Governor of the Yaroslavl Region Sergey Yastrebov said: "Takeda is one of the flagship companies in Yaroslavl's pharmaceutical cluster and is the first major international pharmaceutical company to invest in a new world class manufacturing facility in the region."

However with former Russian PM Vladimir Putin’s 2010 plans to invest RUB120bn ($3.9bn) to boost the local drug production industry​ – along with his warning that firms could face “restrictions”​ if they didn’t set up operations – Takeda is not the first Big Pharma to ponder the market.

GSK, Teva​ and AstraZeneca​, for instance, all announced intentions to work in Russia.

Yastrebov added that the new plant could set an example to other firms looking to house production there. He said: "This project is an excellent example of the benefits that international investment can bring to the Russian economy.  Takeda is working closely with Russian companies to build the plant, and will create hundreds of high quality jobs for Russian people in the future."

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