|Celltrion Group Vice Chairman Gi Woo-seong, left, speaks with Ma Guoqiang, deputy party chief of Hubei Province, during a signing ceremony for Celltrion's investment for the building of a biomedicine plant in Wuhan, Hubei, on Jan. 20. Courtesy of Celltrion|
By Nam Hyun-woo
As fear of coronavirus contagion is already evident in China, South Korea's leading biosimilar manufacturer Celltrion may delay the groundbreaking ceremony for its massive Chinese plant in Wuhan, the epicenter of the outbreak, industry officials said Thursday.
Regarding the possible rescheduling of the event in the wake of the spread of the virus which is affecting economic activity and financial markets, Celltrion said it was "closely monitoring" the situation as the deadly virus may affect the construction of the plant.
"There has been no change in the plan to build the plant so far, but we are closely monitoring the spread of the deadly virus," a Celltrion official said, Thursday. "Since we are yet to break ground for the plant, it is hard to forecast what will happen in the immediate future. We hope the epidemic and the lockdown of the city will not be prolonged."
The epidemic, however, is anticipated to cause setbacks to Celltrion's investment schedule in Wuhan. The company had planned to hold the groundbreaking ceremony in April, but it remains uncertain whether the ceremony will take place at that time as the city remains locked down, they said.
On a related note, KB Securities economist Oh Jae-young expects the impact of the virus could peak in April and last until this summer, dealing a heavier blow to both the Chinese and Korean economies.
Celltrion already evacuated five employees from Wuhan and asked them to work from home until further notice. Also, it will stop sending employees to the construction site for a while.
"Though it is hard to predict the pace of spread, analysts expect the impact will continue until April," an industry official said requesting not to be identified. "It seems it will be difficult for Celltrion to meet its initial schedule of holding the ceremony in April, given the city is currently under a lockdown and there is no guarantee that the measure will be lifted before then."
On Jan. 20, Celltrion signed a deal with the government of Hubei Province over building a 120,000-liter bio plant in Wuhan. The plant will be Celltrion's first overseas plant, if completed. Initially, Celltrion planned to invest at least 600 billion won ($507.6 million) by 2025.
The new Chinese plant is expected to serve as a catalyst for Celltrion both in terms of manufacturing its own drugs but also conducting contract manufacturing as it plans to establish a corporate body in Wuhan to develop biosimilar products and establish a sales network there.
Alongside Celltrion, a number of Korean bio companies are facing possible setbacks to the operation of their Chinese plants following the spread of the virus.
Dong-A Socio Holdings, which is running Suzhou Dong-A Beverage in Jiangsu Province, 740 kilometers east to Wuhan, as the Chinese government called on businesses in Suzhou to stop their employees from resuming work before Feb. 9.
Hanmi Pharmaceutical, which runs Beijing Hanmi, has ordered 1,400 employees there to work from home. Daewoong Pharmaceutical, which has a research arm in China, also ordered employees who returned from the country in January to remain at home and conduct China-related business mostly through e-mail.