MSD Pushes Emerging Market Strategy With New China Packaging Facility

By Dan Stanton

- Last updated on GMT

Related tags Merck Developed country

MSD opens new China packaging facility
MSD opens new China packaging facility
Merck & Co. has opened a new packaging facility in China to support its emerging market strategy but says it is still committed to traditional regions.

The company (known as MSD outside of the US and Canada) has invested nearly $120m (€91m) into the new 75,000m2​ facility in the Hangzhou Economic and Technology Area (HEDA), China which will offer packaging solutions for 16 of its medicines for the local market by the end of the year.

This is the latest expansion for Merck in the region following a $1.5bn commitment to R&D​ in 2011 and comes at a time when cutbacks are being made in other locations.

However, Lainie Keller, a spokesperson for Merck, told that “Merck is committed to both traditional markets and, emerging markets such as China. As one of the world’s foremost emerging markets, China is a critical piece of Merck’s strategy to help us achieve this.”

Whilst acknowledging “most healthcare companies, including Merck, primarily serve the 20 percent of the world’s population that lives in developed nations,”​ Keller said the HEDA plant was “part of an integrated, interdependent global supply chain… to serve the other 80 percent.”

Since the beginning of the year, Merck has announced a manufacturing facility in Ireland​ and another in The Netherlands​ would be shuttered and sold, respectively. Furthermore, following Merck’s acquisition of Schering-Plough​ in 2009, the company has been restructuring both its manufacturing and R&D facilities with closures and job losses in the traditional markets of the US​ and Western Europe​.

The new packaging facility – stated by Merck to be one of the largest in China - is, however, expected to have an annual capacity of more than 300m packages for Merck pharmaceuticals in the Chinese market. Whilst tablets, sterile products and primary packaging materials will be imported from the US and Europe, Keller said secondary packaging materials would be sourced from China in order to support the local industry.

Green Credentials

The facility, which received cGMP accreditation in January, has been constructed to be environmentally friendly with special air, waste and water management procedures and systems built in.

According to Keller, HEDA is in line with Merck’s commitment to discover “more environmentally sustainable ways to do business.”​ The company’s ‘Environmental sustainable road map’​ is a long-term guidance for Merck to transform its green credentials to an eventual point of environmental sustainability, somewhere between 2025 and 2050.

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