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| Janssen Korea CEO Jenny Zheng, left, and Bayer Korea CEO Ingrid Drechsel. |
By Park Jae-hyuk
Janssen and Bayer will join global pharmaceutical companies that have pulled their manufacturing facilities out of Korea over rising payroll costs and intensifying conflicts with unions.
The two international drug makers will close their pharmaceutical factories here soon, according to their local subsidiaries, Friday.
Janssen Korea will close its Hyangnam plant in Hwaseong, Gyeonggi Province, by the end of 2021. The company in charge of Johnson & Johnson's pharmaceutical business in Korea set up the factory in 1983. Industry officials expect domestic drug makers will acquire the plant within the next year.
Janssen Korea said the move was in line with global headquarters' policy of enhancing efficiency.
"Our manufacturing network for solid dosage forms was found to have significant excess capacity, and our future pipeline is unlikely to drive significant volume upside for the solids, due to an ongoing shift of production to cancer drugs and immune booster injections," a Janssen Korea spokesman said.
"As a result, a strategic decision has been made to scale down the Hyangnam manufacturing facility with the intent to fully exit the site by the end of 2021."
Bayer will close its contrast agent manufacturing facility in Anseong, Gyeonggi Province, by the end of this year and move it to Germany, where the pharmaceutical company's head office is located. Bayer Korea notified employees of the plan in May last year.
The company cited the shrinking domestic market as a reason for the shutdown.
"If a company pays the same amount of wages despite declining production, the payroll costs will obviously weigh on the company," a Bayer Korea spokeswoman said. "We have no reason to maintain our plants in every country, because of the global tendency of establishing integrated logistics centers."
According to the spokeswoman, several employees had already taken voluntary retirement and compensation.
Janssen Korea implied it would also lay off workers when the factory closed, but said it would seek opportunities for employees to continue with Janssen or the parent company.
"Some of our workers may leave our company to seek other opportunities," its spokesman said.
Including the Bayer and Janssen factories, 16 factories of global drug makers have closed over the past 20 years. Most of the companies moved their plants to China and Southeast Asian countries. Industry officials fear that local units of global pharmaceutical companies may become importers, not manufacturers.
Johnson & Johnson, Janssen Vaccines and Korea Otsuka Pharmaceutical are the only three global pharmaceutical firms that have yet to decide whether to close their manufacturing facilities here. Johnson & Johnson specializes in quasi-drugs.
Janssen and Bayer vowed to continue their Korean operations, making investments in the Korean market even after closing their factories here.
