(Oct 9): Roche Holding AG will add manufacturing capacity in China to serve the country’s growing market, making it the latest pharmaceuticals giant to split some of its production as US-China trade rivalry intensifies. 

The Swiss company will manufacture more diagnostic products in China and increase production capacity for medicines, chief executive officer Thomas Schinecker said at a press event in Mannheim, Germany, on Wednesday. The CEO referred to the move as “China for China” production. 

“China is simply unbelievably big,” Schinecker said. “This means that we will have to continue to invest in order to expand this even further.”

The US is by far Roche’s biggest market, while China is a key area for growth. Trade tensions between the world’s two largest economies are being felt far beyond the pharma sector, hitting makers of semiconductors, solar cells and electric cars. 

Certain raw materials for the pharmaceutical industry also come from China, Roche’s Schinecker said, with few alternative sources.

“In this respect, the geopolitical situation must hopefully ease,” he said. “Otherwise, there might be problems for patients.” 

Roche’s drug substances are produced outside of China, Schinecker said. The in-country focus is on the final stage of production, known as fill and finish: Drugs are put into vials, sealed into boxes and prepared for shipping to customers. 

“We won’t move everything to China,” the CEO said. “I don’t think that would be right.”

More production will take place there, “but that will be in China, for China”, he added.

Roche announced a three billion yuan (US$420 million or RM1.82 billion) expansion of its diagnostics production site in Suzhou in August. The expansion should be complete by 2028, the company said. 

Roche is not alone in pushing towards separate manufacturing for China. AstraZeneca plc is planning to split its manufacturing network to ensure medicines for major markets including the US, China and Europe are produced separately, CEO Pascal Soriot said earlier this year. 

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