Glaxo Wellcome Anti-Infective Drugs Plant, Suzhou, China

Glaxo Wellcome is investing in new production facilities in Suzhou in the eastern Chinese province of Jiangsu. The plant will produce new anti infective drugs including a treatment for hepatitis B.

Glaxo Wellcome is a research based pharmaceutical company. Its headquarters are in UK.

HEPATITIS B

The Glaxo investment in the plant is geared especially for the Chinese market. The Chinese market has the world's largest community of sufferers from the hepatitis B. It is a potentially huge market where almost 120 million people are believed to suffer from the disease.

So far the Chinese pharmaceutical market has been adversely affected by poor enforcement of intellectual property (IP) legislation with the result that many western products are subject to piracy. This situation has seen many companies losing large amount of money. While international drugs companies are still affected by widespread patent infringements in China, there are signs that the pharmaceuticals industry is beginning to have some confidence in the country's emerging regime for intellectual property (IP) protection.

Glaxo hopes that a comprehensive system of patent recognition and respect for intellectual property rights is slowly emerging. This belief was the main reason behind the company's decision to build the new factory in China.

Glaxo was encouraged by the establishment of a legal framework to enforce the rights of patent holders and further heartened by a direct commitment given to the company by the Chinese government. The Chinese government has already promised patent protection for product marketed within the next two to three years and administrative protection to those drugs patented in the past few years in the USA and in the process of getting a Chinese patent.

PROJECT TIMESCALE

The project management and construction management contracts were awarded in 1998. The facility will be operational by the year 2001.

LEAD CONTRACTORS

The contract to design a new Glaxo Wellcome plant at Suzhou, was awarded to Dewjoc, in the UK. Kvaerner was contracted to provide project management, construction management, Chinese design institute management and procurement services.

SUZHOU PROJECT CHARACTERISTICS & COSTS

The facility, currently under construction in Suzhou, is producing Lamivudine (the first oral treatment for hepatitis B). The Suzhou factory will also manufacture other Glaxo Wellcome products, currently made in the UK and sold in China. It is planned that a range of products, including Heptodin and antibiotics, will be manufactured at Suzhou. Therefore the plant will also serve as a mainland China based headquarters for sales and marketing.

The pharmaceutical facility comprises primary and secondary plants with clean room facilities, process and others ancillary buildings and external works. Part of the complex will be the warehousing and materials receipt/dispatch facilities, the general and pharmaceutical quality utility system, administration laboratory and utility areas, and the general infrastructure surrounding the facility.

The Suzhou project was co ordinated from Dewjoc's headquarters in Middlesborough, with two senior staff spending 18 months on site, providing technical support to the Chinese construction teams to install both imported and local components.

The new plant comprises ten buildings, including three environmentally controlled manufacturing modules and an automated receipt and despatch warehouse.

The buildings sit on 24m long piles supporting a raised ground floor, and are designed to withstand earthquakes and tropical storms. Steelwork and cladding, including the entire external façade, was fabricated in the UK and shipped to China by sea.

These new facilities will cost approximately £85 million.