'Agility, digitalization are key edges of Samsung Biologics'

James Park, executive vice president and head of global sales center at Samsung Biologics, speaks during a press conference held on the sidelines of the CPHI exhibition in Frankfurt, Germany, Oct. 25. Courtesy of Samsung Biologics

By Baek Byung-yeul

FRANKFURT ― Samsung Biologics has been increasing its presence in the global contract development and manufacturing organization (CDMO) business, generating larger revenues than market expectations this year. Such growth was possible thanks to its agile response to improve production capacity and achieving a digital transformation, according to its executives, Tuesday.

"We recently completed the construction of our fourth plant in Songdo, Incheon. We have built four plants only in 11 years and became No. 1 CMO (contract manufacturing organization) company as our production capacity accounts for about 30 percent of the global biomedicine production," James Park, executive vice president and head of the global sales center at Samsung Biologics, said during a press conference held on the sideline of the CPHI bio pharmaceutical exhibition.

"It took 23 months for us to build the fourth plant, which is really fast. It usually takes 48 months. This was possible because of the speedy management which values speed in all areas such as construction, production and operation," he said.

For the fourth plant, Samsung implemented what it calls the parallel construction method, which conducts major building processes such as factory design, procurement and construction at the same time.

Under its speedy management philosophy, the company generated over 2 trillion won ($1.4 billion) in sales in three quarters of this year, exceeding the market consensus. Contracts secured with large companies such as GSK and AstraZeneca are also increasing.

James Choi, executive vice president and chief information and marketing officer at Samsung Biologics, speaks during a press conference held on the sidelines of the CPHI exhibition in Frankfurt, Germany, Oct. 25. Courtesy of Samsung Biologics

James Choi, executive vice president and chief information and marketing officer of the company, said achieving digital transformation is another key to solidifying its status in the CDMO business.

"The biopharmaceutical business is a regulatory business and is passive in the application of new technologies such as digital technology compared to other industries. So we think we could further increase our competitiveness if we apply digital technology faster," Choi said.

Samsung Biologics has established electronic management systems that digitize a wide range of data needed for drug production. "By digitizing our data, we can improve the speed of our drug production. This helps our clients receive their drugs faster and eventually the benefits go to patients," Choi said.

'We will build factories in US, Europe'

Park also reconfirmed Samsung Biologics' expansion strategy that the company will build its plants in the U.S. and Europe where most of its client companies are located, saying it is a key goal. But he added the company has no specific plans at this moment because market conditions are not in good shape.

"We have to go abroad someday. This is because our clients are located overseas. For the expansion in the U.S., we are looking for proper sites in California, Texas and North Carolina, but we will continue to measure the possibility because the current market situation is not good," Park said.

"When calculating the construction period and cost, building a factory in the U.S. will be longer and more expensive than adding a facility in Songdo. That's why we purchase the site in Songdo for our second bio campus. But we are always looking at expanding our production capacity to solidify our status as a leading CMO company," Park added.

In regard to Washington's move to launch an initiative to favor domestically manufactured bio, drug and other medical products, which is similar to the move to provide tax credits only to buyers of electric cars assembled only in North America, Park said the company is expected to face no impact even if the initiative is implemented.

"We assume we won't get impacted by the initiative. We've conducted research about the initiative and this is mainly focused on small molecules, not biomedicine, because it aims to control China's drug manufacturing capability. So we don't think we will be affected by that," he said.

James Choi, right, executive vice president and chief information and marketing officer at Samsung Biologics, and James Park, the company's executive vice president and head of global sales center, answer questions during a press conference held on the sidelines of the CPHI exhibition in Frankfurt, Germany, Tuesday. Courtesy of Samsung Biologics

'ESG management becomes essential in bio industry'

When asked about what kinds of industry trends can be expected at this year's CPHI exhibition, the executives said the importance of ESG (environment, social and corporate governance) management is becoming more important as large-sized companies were emphasizing that they are seriously focusing on sustainable growth with an eco-friendly approach.

"Looking at the speaking session during the exhibition, many topics of the sessions are related to ESG. I felt that the pharmaceutical industry is strongly focusing on how to achieve sustainability," Choi said.

"European companies such as GSK and AstraZeneca have received a lot of attention as they initiated ESG management. When we are engaged in winning new contracts, we also have emphasized to our clients that Samsung Biologics is actively performing ESG management," Park said.