Samsung Biologics on Tuesday announced its plans to invest 1.74 trillion won ($1.46 billion) and hire 1,800 new employees for a massive fourth plant in Songdo, Incheon, by 2023.

“At 256,000 liters output in a single generation, the new plant will renew our record as the biggest single biologics generator,” said CEO Kim Tae-han.

“After construction, Samsung Biologics will have a combined 620,000-liter output at its Songdo complex 1, accounting for 30 percent of the world’s contract manufacturing market.”

The company currently has a combined 364,000-liter capacity at its three existing plants, with its third plant touted as having the world’s largest capacity as a single plant at an output of 180,000 liters.

Construction of the fourth plant, including a facility validation period, will take 36 months -- a radically short time compared to the average 50 months it requires for peer companies to build an advanced manufacturing plan. It is poised to result in job creation of 27,000 and a 5.6 trillion won economic benefits.

Plant 4 will be a hybrid plant that has both the stainless steel and single-use disposable bioreactors for multifaceted services. Operations of the manufacturing lines in urgent demand by clients will begin as early as the end of 2022.

Not only will the new plant be impressive in size, it will be a game changer in the bio industry.

Speed is of critical significance in the biologics market. At the new plant, Samsung Biologics will provide a one-stop service comprising of cell line development, clinical sample manufacturing, both active pharmaceutical ingredients and drug substance manufacturing and fill-and-finish drug product manufacturing.

The comprehensive service portfolio at a single manufacturing site can dramatically reduce the amount of time it takes for a drug to be commercialized, Kim said.

Samsung Biologics will utilize its 240,000 square meters of empty land for the fourth plant. At the same time, it will seek to purchase an additional 330,000 square-meter plot of land to build a second bio complex within Songdo for an open innovation research and development center where it envisions nurturing Korea’s future biotech firms.

Including the purchase of new land, Samsung Biologics will invest 2 trillion won in total.

“Currently, we have 860 billion won in cash reserves and a stable annual operating profit. If you look at our cash flow, even considering the depreciation cost of our facility maintenance, we expect to make surplus. Our high credit ratings and low debt-equity ratio will allow us to take out loans on favorable terms, if we need to,” Kim said.

The biologics drug product market is growing at an annual average of 8 percent, and both contract development and contract manufacturing are growing at an annual average of 16 percent.

This growth is further fueled by the sharply aging societies as well as the recent COVID-19 pandemic, Kim said.

The sudden global pandemic is changing the paradigm of biologics development and manufacturing at global big pharmas that previously relied on in-house laboratory and plant capabilities.

In order to secure supply chain for COVID-19 treatments upon successful development, and simultaneously continue other novel drug developments without any hiccups, big pharmas are increasingly seeking out support from CMOs and CDOs.

Building a fourth plant is a plan to preemptively respond to this acceleration in biologics market growth, Kim said.

Biotech is the next growth engine after information technology, and it is of utmost importance for a nation to foster the industry in order to stay abreast, and ahead globally, Kim emphasized.

Currently, Samsung Biologics and Incheon City government are in discussions to build a Korean model of Ireland’s National Institute for Bioprocessing Research and Training.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)