Germany's Bionorica looks to Russia for expansion

Print 31 December 2015
Eric Sagonowsky / FiercePharmaManufacturing

While recent economic instability has deterred some pharma plans in Russia, Germany's Bionorica says it's unfazed and will expand with a new plant there.

The herbal-drug producer, led by CEO Michael Popp, will build its first Russian plant in Voronezh, about 320 miles south of Moscow, Bloomberg reports. With construction expected to start in 2017, the "herbal plant extraction site" would be the company's first outside of its headquarters in Neumarkt, Germany, according to the news service.

Russia is Bionorica's second-largest market, accounting for about 30% of its revenue, Bloomberg noted. The company also has plant-growing operations in Budapest and on the Spanish island of Mallorca.

Popp and his company plan to make the move in the face of an unfavorable economic climate in Russia that features Ukraine crisis sanctions, suffering oil prices and a weak ruble, conditions that have led some companies to scale back there. Last year, citing political turmoil, Fresenius Kabi called off a deal with Binnopharm that would have expanded its production capacity in Russia; the two said they would look for other ways to work together.

However, Bionorica isn't alone in committing to Russian manufacturing despite the economic situation. Earlier this month, Australia's CSL opened Moscow operations for its CSL Behring unit, adding that it is looking for ways to partner on projects with local government.

Beyond that, AstraZeneca ($AZN) and Novo Nordisk ($NVO) each opened new manufacturing capacity in the country, in October and April, respectively. AstraZeneca spent $224 million on its facility and Novo Nordisk shelled out $100 million for its plant; both are located in Kaluga about 90 miles outside of Moscow. 

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