General News

Siegfried buys more land at home site

Agrement with city and StWZ gains room for expansion

Swiss pharmaceutical CMO Siegfried has signed a land exchange agreement with city authorities in Zofingen, the location of its head office and main facility, and StWZ Energie, the local public utility company. This will gain the company 80,000 m2 of land directly bordering its premises for expansion, while giving the city property to establish new or expand existing businesses and StWZ Energie land to relocate its administration and operations buildings.

The company described this transaction as “part of various measures taken to improve Siegfried’s production facilities, which the company aims to implement in the current year”. No financial details or specific expansion plans have been disclosed, but it follows on from the decision to establish a facility in China and a new acquisition in the US for the company, which had an excellent year in 2011 even as other CMOs in the field struggled.

In June, Siegfried announced that it is to build a plant in Nantong, north-west of Shanghai, which is due to begin production in 2014. The company is being supported in this by the Chinese development organisation NETDA, which will both provide a fully functional industrial infrastructure and help in obtaining the required authorisations and licenses.

The initial phase will be a plant making APIs and intermediates to cGMP standards. Under the land rights Siegfried secured at the industrial park last year, permits are available to add other capabilities, most probably finished dosage forms, in a second phase.

Siegfried described the move in terms of developing production capacity in China within the parameters of geographical diversification of production locations and improving the cost structure. According to CEO Dr Rudolf Hanko, the new facility “will help us improve both our cost structure and our market access in Asia”.

At the end of May, Siegfried had acquired Alliance Medical Products, a Californian supplier of sterile filling services with revenues of $20 million last year, thus fulfilling a long-term strategic goal. The price of $58 million is supplemented by a contingent earn-out consideration subject to AMP meeting defined profitability goals for the 2013 fiscal year. The transaction is expected to be accretive to earnings this year.