Novo will soon open plant in Russia

Print 28 January 2015
Eric Palmer, FeircePharmaManufactoring

The Russian ruble maybe in rubble, but the economic challenges will not deter Novo Nordisk ($NVO), which is finishing up a plant in Russia. Five years in the planning and nearly three in construction, execs say it is needed to fulfill the drugmaker's long-term goals there.

Jakob Riis, Novo's head of marketing, medical affairs and stakeholder engagement, waved off any idea that the current situation might derail the drugmaker's production plans there, telling Bloomberg that the insulin manufacturing plant is needed for the long haul. "Russia is not a mess," said Riis, who was in Davos, Switzerland, for the World Economic Forum's annual meeting. "We want to continue to run good business" there, he told the news service.

Novo announced in 2010 that it would build an insulin plant in Russia and two years later said it had started work on the $100 million facility. The complex is in the Grabtsevo Technopark in the Kaluga region. In an email Monday, Novo spokeswoman Anne Margrethe Hauge said the plant "will open officially in the first half of this year and is expected to employ between 100-150 people." She said Russia currently makes up less than 1% of Novo Nordisk's global sales.

Russia's economy has been under siege by falling global oil prices and sanctions placed on it by Western countries for its involvement in fighting in Ukraine. That has had an impact on Western companies with operations there and led to lots of speculation about the status of unfinished projects. There were rumors that Novartis has stopped work on a plant near St. Petersburg because of the economic uncertainties. The Swiss drugmaker responded that it had simply faced a slight delay for technical reasons.

The financial turmoil did undercut plans last year by Germany-based Fresenius to create a partnership with Russia's Binnopharm, a drugmaker with two manufacturing facilities that make IV drugs, infusion solutions and active pharmaceutical ingredients. It announced in November that "Changing political and regulatory circumstances in the region have made the closing of the joint venture more challenging than anticipated." It said the two companies would look at other ways to work together.

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