Pharmaceutical Giant to Expand Korea Operations

The manufacturing lines of Janssen Korea have joined the Global Pharmaceutical Supply Group of Johnson & Johnson, a move that will likely make Korea the group’s production base for the Asian market and induce more direct investment into the country.

Johnson & Johnson, the parent company of Janssen Pharmaceutica, operates the group to consolidate supply chain operations for all Johnson & Johnson pharmaceuticals manufactured worldwide.

“Johnson & Johnson designated Janssen Korea the 11th member of the (pharmaceutical group) last month,” Janssen Korea said Sunday. “We plan a series of investment in assembly lines for expansion and modernization over the next few years, including two billion won this year for new equipment.”

The group has offices in ten countries in Europe, North and South America and Asia.

Janssen Korea said it will seek to raise the number of its export markets to more than the eight it has all in Asia.

The decision comes despite many multinational pharmaceutical firms leaving Korea over the past few years due to high labor costs and militant unions.

In August last year, Boehringer Ingelheim Korea sold its factory in Cheongju, North Chungcheong Province, to SK Chemicals. Three months later, GlaxoSmithKline announced the closure of its Korean operations.

The number of global pharmaceutical manufacturers operating in Korea has fallen from 15 in 2004 to just four: Janssen Korea, Bayer Schering Korea, Korea Otsuka Pharmaceutical and MSD Korea.

“The Janssen Korea factory recorded the highest productivity among 20 global production bases of Janssen last year, and not a single conflict has erupted between management and labor since the subsidiary opened in 1983. I believe these two factors were key,” said factory manager Jeong Ho-jin.

Another Janssen Korea executive said, “The decision partly shows the high expectations put on the incoming Lee Myung-bak administration, which stresses market- and business-friendly economic policies.”

Janssen, the pharmaceutical operations of the U.S. healthcare giant Johnson & Johnson, established its Korean subsidiary in May 1983 to produce over-the-counter drugs. Janssen Korea’s sales last year reached 190 billion won, or about 200 million U.S. dollars.