Orion Holdings Corp., one of South Korea’s largest confectionery companies, said on Wednesday it will build a vaccine plant in China by 2024 to manufacture a tuberculosis vaccine for adults.
The Korean company, best known for its signature product choco pie, said it has signed a comprehensive vaccine development and cooperation agreement with city government officials of Jining, Shandong Province in China.
Under the agreement, Orion has secured 49,600 square meters of land in a biotechnology industrial complex in Jining to build a 90 billion won ($69 million) vaccine production facility.
The project will be led by Shandong Lukang Haoliyou Biotechnology Development, a joint venture between Orion and Jining-based Shandong Lukang Pharmaceutical Co. Orion holds a 65% stake in the JV while the Chinese pharmaceutical firm owns the rest.
Tuberculosis vaccine development will be made in cooperation with Korean vaccine maker Quratis Co.
Quratis, a Korean vaccine maker There’s no tuberculosis, commonly known as TB, vaccine for adults. BCG, or Bacillus Calmette–Guérin, is a tuberculosis vaccine with its efficacy lasting 10 to 15 years and is intended for infants.
Earlier this year, Shandong Province designated tuberculosis vaccine development as one of its key pharmaceutical projects.
“With the government support, our vaccine project will gain speed in China,” said an Orion official.
AGGRESSIVE IN TAPPING INTO CHINA’S BIO MARKET
Orion Holdings has for years been tapping into the Chinese biopharmaceutical market estimated at around 160 trillion won.
In May of last year, Orion signed a deal to acquire colorectal cancer diagnosis technology from Genomictree Co., a Korean biotech firm, and in November built a laboratory and production facility for cancer diagnostic kits in China.
Orion's signature product, choco pie China is already a big confectionery market for Orion. The company’s China sales reached 1.1 trillion won in 2021, compared with 807.4 billion won in Korean sales.
KB Securities and other Korean brokerages recently lowered Orion’s target price by up to 15.6%, citing the confectionary maker’s heavy reliance on the Chinese market.
Orion’s China sales significantly dropped in 2017 when the Chinese government took issue with Seoul’s decision to deploy a THAAD US missile system in Korea.
Shares of Orion Holdings finished up 3.7% at 15,300 won on Wednesday, outperforming the broader benchmark index Kospi’s 0.5% rise.
