And so it Grows...European Pharmaceutical-Biotech Industry Investing Billions in Capital Construction Projects

Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--As the North American Pharmaceutical-Biotech Industry, which includes coverage of pharmaceuticals, biologicals, medical devices and cosmetics, continues to return a healthy capital expenditures (capex) investment profile, Europe's volume of project activity cannot be ignored. Barely months into the launch of the expansion of project coverage into Europe, over $14.5 billion in active capital and maintenance (MRO) activity across the pond has been identified and reported upon.

Click the image at right to view pharma-bio projects in Europe.

Divided among 166 individual projects, the average total investment value (TIV) of each of the European projects is an impressive $87 million. Individual TIVs range from $1 million for a scheduled maintenance project at an oral solid-dose production plant in Carrigtwohill, Ireland, all the way up to and more than $1 billion for the construction of a major drug development campus in Basel, Switzerland.

All of this activity is not entirely unexpected, with North America and Europe representing the top two markets for the industry. The very nature of the projects is a great representation of the industry's diverse and global pedigree. From contact lenses to biological drug development and production, the majority of the major companies reported on in Europe have a strong North American presence as well.

It is not uncommon for corporate planners on the major projects to be on a different continent from where construction of the new plant, or expansion will take place. A key engineering project director for a biologics project in Dublin may well be located in New York, New York while at the same time, a grassroot API project destined for North Carolina is being whiteboarded in Bagsværd, Denmark.

There are also a large number of smaller scale European drug industry manufacturers carving out their niche within the industry, including everything from generics to over-the-counter (OTC) products. Much like that which is found in North America, there are a growing number of domestic contract manufacturing organization (CMO) plants, offering everything from API production to finished dosages.

Of the reported 166 active projects, 107, representing nearly $8 billion in capital investment, have a future kick-off date. With new projects being added daily, the current European operational pharmaceutical-biotech plant database of 817 sites is growing as well.

A random sampling of some of the reported European projects reveals the type of projects being built are similar to what is seen in North America. In Hanko, Finland, Fermion Oy is investing $33.7 million to expansion an existing API contract manufacturing (CMO) plant.

Chanelle Medical Ltd has decided to invest nearly $79 million in Galway, Ireland, to expand its animal and human generics CMO plant. The project will also add drug development capacity.

GlaxoSmithKline's (NYSE:GSK) (Brentford, England) is planning a massive investment in Ulverston, England. Adjacent to the existing manufacturing plant, the first phase of the proposed three-phase "Ceph" project is for a $215 million investment to construct a biopharmaceutical manufacturing plant.

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