Singapore incentives lure Novartis to set up big drugs plant
WORLD NEWS
Singapore incentives lure Novartis to set up big drugs plant.
By JOHN BURTON
452 words
6 July 2004
Financial Times
London Ed1
Page 8
English
(c) 2004 The Financial Times Limited. All rights reserved
Plans by Novartis to make Singapore the site for what is expected to be its
biggest drug manufacturing plant in Asia has given another boost to efforts by
the city state to make pharmaceuticals one of its main industries.
The government has sought to attract global drug makers with a five-year,
Dollars 1.8bn (Euros 1.5bn, Pounds 984m) programme that includes research
financing, start-up capital, tax breaks and new facilities.
Daniel Vasella, Novartis chairman and chief executive, would not disclose what
financial incentives the Swiss company would receive for opening a new plant and
a research institute for tropical diseases. He said Novartis had selected
Singapore because of its research facilities and political stability.
Novartis, the world's fifth biggest drug maker, will join several other rivals,
including GlaxoSmithKline, Wyeth and Schering-Plough, that have recently built
manufacturing plants there.
Singapore hopes pharmaceuticals will help reduce its dependence on electronics
and petroleum products as the main foreign exchange earners, with drug exports
estimated to exceed Dollars 5bn this year.
But economists have warned that the pharmaceutical industry is a highly volatile
sector.
The government has also encouraged global drug makers to establish research
facilities to help train local scientists and enable Singapore to develop drug
patents.
Novartis's new research institute, which formally opened yesterday, will focus
on developing drugs for dengue fever and other tropical diseases. Eli Lilly and
Viacell have also opened research institutes and their costs are partly
supported by government grants.
Singapore's Economic Development Board, the prime mover behind the push into
pharmaceuticals, has said the city state's well educated, English-speaking
workforce, reliable electricity and water supplies, and good transport links
makes the country an attractive hub.
But Mr Vasella said high labour costs and surrounding regional instability could
limit Singapore's appeal.
Other Asian countries also had disadvantages. "China needs further progress in
intellectual property protection," he said. Novartis has considered acquiring
Indian generic drug producers but was deterred by their high prices.
Asia remains Novartis's smallest regional market, on a par with Latin America,
Mr Vasella said.
One potential obstacle in Singapore creating its own pharmaceutical industry,
instead of relying on foreign investments, is the shortage of local scientists
in the city-state of 4m people. Novartis has agreed that its institute will
provide research training to local scientists as part of its tropical disease
institute. Singaporeans are expected to fill a quarter of staff posts at the
research unit.
Singapore has also opened a biopharmaceutical facility with the goal of
developing drugs that could be provided on a contract basis to other companies.
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