|CJ Group Chairman Lee Jae-hyun presents the group's detailed mid-term growth plan until 2023, November 3. Courtesy of CJ Group|
By Kim Yoo-chul
A few days after CJ Group ― a mid-tier conglomerate in Korea focused on food and beverages ― said it plans to invest up to 10 trillion won until 2023, its entertainment affiliate said it is about to enter the highly-lucrative biopharma CDMO business.
CJ Group said Tuesday that CJ Cheiljedang is seeking approval to acquire a stake in Batavia Biosciences based in the Netherlands. Sources and officials said that the group was positive on getting the go-ahead to do so from regulatory authorities in the Netherlands.
CJ Cheiljedang, the country's leading supplier of lysine for animal feed, said that its board approved its plan for the acquisition of a 75.8-percent stake in the Dutch company for 267.7 billion won. Specifically, CJ is interested in purchasing 50,807 shares in Batavia, including 13,007 new shares.
If its stake acquisition plan is completed, Batavia will retain its management as the second-largest shareholder, the request of which has also been approved by the CJ board. Korean regulatory authorities are set to approve the proposed stake acquisition plan, sources at the country's antitrust agency said.
Its leader, Chairman Lee Jae-hyun, has identified platforms, wellness, culture and sustainability as the group's top priorities. CJ has been quite effective in terms of managing its entertainment- and food-oriented businesses. However, these businesses are highly competitive and typically have narrow margins.
Its stake acquisition in Batavia represents the group's comeback to the pharmaceutical business sector three years after another unit ― CJ Healthcare ― was sold off to Kolmar Korea in 2018.
But this time, CJ is betting on Batavia, which is a biopharmaceutical contract development and management organization (CDMO), working on vaccine, viral vector, protein and antibody projects. In terms of the potential of CDMOs, as the core competitiveness of Korean companies lies in manufacturing, Samsung Biologics, SK Bioscience and LG Chem are jumping into the field, and their results have so far been impressive, according to analysts.
"Behind the reason for the stake acquisition is the fact that Batavia's client portfolio is trustworthy and stable, based on the amount of core technology in the businesses it is involved in, specifically in the virus vaccine and viral vector areas, in addition to its proven manufacturing ability," an official at CJ Cheiljedang said.
During the chairman presentation of the group's mid-term business growth plan, he said that the group is set to sharpen and develop through CJ Cheiljedang product lines that have previously been untouched.