INTERVIEW Huons makes big bet on China

Beijing plant to be operational within this year

By Park Si-soo, Lee Han-soo

PANGYO, Gyeonggi Province -- Korean pharmaceutical company Huons Global will open its first overseas plant in China this year, paving the way for the firm to reach its ambitious goal of having plants in three countries by 2025.

The plant, located in Beijing, will initially produce xerophthalmia eye drops and then expand its product lineup to medicines for other ophthalmologic diseases, obesity, enteric diseases, menopausal symptoms and beauty products. The plant will also churn out medicines ordered by Canada’s Midbridge, Malaysia’s CCM and other non-Chinese pharmaceutical firms seeking a production base in China. The company has formed partnerships with multinational drug companies to ensure smooth distribution of the plant’s products.

“The Chinese plant is a big milestone for our company. It’s our visible promise and commitment to going global,” said Yoon Sung-tae, vice chairman of Huons Global, in a recent interview at his office in Pangyo, Gyeonggi Province. He said Huons will strive to become an international healthcare company by 2025 with production facilities in three countries, six self-developed innovative drugs and nine affiliates.

As of 2015, Huons Global is the 15th-largest pharmaceutical company in Korea in sales with six affiliates. It reported 215.1 billion won ($193.69 million) in sales and 34.3 billion won in operating profit last year, up 37.4 percent and 62 percent year-on-year, respectively. The firm’s six affiliates have shown impressive performances in their respective segments -- Huons (pharmaceuticals), Humedix (applied biopolymers), Hubena (medical containers), Hiniz (disinfectants), Huonland (eye drop joint venture in China) and Huons Natural (heath functional foods).

The company has spent an average 6.5 percent of its annual sales on R&D activities in recent years with next year’s ratio set to more than 7 percent. Its R&D will focus on Xerophthalmia, obesity, inflammatory and ulcerative enteric diseases. Separately, the company is developing advanced xerophthalmia eye drops using 7.5 billion won given by the government last year.

“We have worked with major global pharmaceutical giants for many years under a contract manufacturing deal, which means our technologies are already recognized as creditable and competitive internationally,” Yoon said. “We will continue to increase our R&D budget to develop global blockbusters and expand Huons’ presence in the U.S. and other trend-leading markets.”

The vice chairman aims at increasing the group’s combined sales to 1 trillion won by 2020 with 30 percent of the projected sum expected to be generated overseas.

“We made a big bet on China,” he said. “I expect that China will contribute to 30 percent of overseas sales, followed by the U.S. with 20 percent and the remaining 50 percent from Japan and other Asian countries.”

Yoon said the company would be aggressive in taking over companies -- small and large -- that are considered helpful in bolstering Huons’ competitiveness. He said there are “some companies” under his consideration, but didn’t elaborate.

Yoon said building trust with employees, business partners and customers is the most important activity for companies going overseas.

“Conflicts caused by cultural differences or misunderstandings are sort of an unavoidable byproduct for companies expanding beyond their borders,” he said. “I believe these conflicts would be settled only when we approach our counterparts with a great deal of patience and open-mindedness to understand them. It would be tough and time-consuming, but worth it.”