Recent Big-Ticket Investments in Hungarian Pharma

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Hungarian national champion Egis and French Big Pharma Sanofi have both made recent big-ticket investments in new facilities in Hungary. Egis’ new manufacturing plant in Körmend and Sanofi’s new shared service centre in Budapest respectively stand to have a sizeable impact on the local economies and show the increasing attractiveness of Hungary as a pharma investment destination.

 

This is a unique event in Egis’ life

István Hodász, CEO, Egis Pharmaceuticals

Egis Pharmaceuticals is an important player in the EU market for biosimilar medicines, its exports reaching 71 countries worldwide. In 2018 Egis announced it would be making an investment of EUR 22 million in its plant in Körmend, a western Hungarian city of around 13,000 inhabitants. The 4,000 square meter plant with six production lines and a 25-million-unit capacity, inaugurated in September 2019, allows the company to produce non-solid medicine products such as creams, ointments, gels, suppositories, and drops.

 

Due to the fact that Egis is the largest employer in Körmend, the company received a grant from the government of more than EUR 3 million. CEO István Hodász commented at the plant’s September 20 inauguration ceremony, “This is a unique event in Egis’ life: we can continue our expansion on our export markets with new, globally competitive pharmaceutical products we develop within the framework of the project at the new galenic plant.” 

 

Sanofi, despite layoffs and forced retirements in Japan and Europe and the divestment of its Czech Republic-based generics manufacturer Zentiva, is making a move to invest in its Hungarian business, opening a shared services centre in Budapest. The centre will initially employ 100 workers and will provide business services such as accounting, finance and human resources.

 

Its strategic location in Eastern Europe makes it an international hub that will provide services in seven different languages. Currently, Sanofi has more than 2,000 employees in Hungary at three manufacturing plants, a logistics site and a global strategic unit. The plan for the shared services centre is to grow to 350 employees by 2022.

 

Hungary’s pharma industry has shown signs of growth in 2019, with industrial production up by 12 percent in July. According to government officials, the industry contributes a substantial share to the country’s economy. Minister of Finance Mihály Varga noted that the pharmaceuticals account for six percent of Hungarian GDP – having grown by 50 percent since 2010 – and employs around 14,000 people. Furthermore, the value-added ratio of this sector is 38 percent; almost double the national average. The pharma industry’s commitment to investing in innovation underscores the importance of the sector.

 

Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó noted that “the importance of the pharmaceuticals industry is increased by the fact that, as a research-orientated activity, it spends an outstandingly high proportion of its income on innovation.”

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