By Kimberley Kao

Sanofi plans to spend about $1.05 billion building a new insulin manufacturing base in China, the French company's largest single investment in the world's second-largest economy.

The French drugmaker said in a WeChat statement on Monday that the investment of about 1 billion euros, equivalent to $1.05 billion, will enhance the production and manufacturing of insulin, focusing on serving local diabetic patients. The new base, which will be located in Yizhuang, Beijing, marks Sanofi's second production base in the capital and its fourth in the country.

Sanofi chairman Frédéric Oudéa in his first visit to China since taking on the role attended the contract signing ceremony in Beijing, together with Chief Executive Paul Hudson and a team of senior executives, the statement said.

The Paris-based company has been in the Chinese market for over 40 years, where as of end-2021 there were over 140 million adults with diabetes, or about 12% of the population, according to the statement.

U.S.-China disputes over trade and military issues in recent years have shaken the industry as U.S. and European pharmaceutical companies often depend on China for basic chemistry services and pharmaceutical ingredients.

Changes don't mean a full severing of industry ties between China and the West.

Executives say the cost for top-notch Chinese work is typically lower than in the West, and U.S. and European drugmakers still see promise in selling their products in China, a country with a large drug market and a rapidly aging population.

China is expected to be the world's fastest growing pharmaceutical market by volume over the next five years, according to health-data company IQVIA. Chinese spending on medicines reached $163 billion last year and is expected to grow by over $30 billion by 2028.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

December 03, 2024 00:35 ET (05:35 GMT)

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