Celltrion Pharm will invest 2 trillion won to secure additional production facilities for prefilled syringes (PFS) used in subcutaneous injections (SC) and other products. The strategy is to expand the manufacturing base that underpins the group's SC strategy while broadening PFS production—so far centered on group-affiliated volumes—to external clients to grow the PFS contract manufacturing (CMO) business.
However, five days after the investment announcement, the company's first labor union was launched, and labor-management conflict has emerged as a new variable for quality control. Following the establishment of the group's first union at Celltrion on the 6th of the previous month, the launch of a union at Celltrion Pharm has prompted assessments that the group's overall labor management system is at a crossroads.
◇"Staff shortages threaten quality"…labor variable for Celltrion's SC strategy
The Korean Chemical, Textile & Food Workers' Union (KCTFU) Celltrion Pharm chapter announced its official launch on the 6th and claimed in its founding declaration that management is pursuing top-line growth by excessively increasing production without adding staff. The union also said practices potentially violating labor laws persist, including abuse of the fixed-salary system for overtime, failure to record extended work hours, and forcing employees to use their annual leave.
If the union's concerns are accurate, there are worries that warning lights could flash for Celltrion Pharm's quality control system. The union said, "Chronic staff shortages and accumulated fatigue are factors that threaten compliance with good manufacturing practice (GMP), which must be strictly controlled."
Given that Celltrion Pharm handles not only finished-product manufacturing but also process development services, some say the staffing burden may not be limited to production workers. Of the 132.1 billion won in first-quarter sales this year, process development service revenue was 30.8 billion won, accounting for 23%. On a full-year basis last year, that revenue reached 124.3 billion won, also 23% of the total, with most of it coming from Celltrion.
Within the group, Celltrion Pharm is the key production base that completes drug substances (DS) into drug products (DP) that can be administered to patients. Celltrion's decision to push this large-scale plant investment through Celltrion Pharm is seen as a move to leverage a production base that already holds GMP certifications in five major markets, including the United States, Europe and Japan.
In the global contract development and manufacturing (CDMO) industry, not only production capacity but also stable labor relations are cited as factors in evaluating supply chain reliability. As Celltrion is working to shift intravenous (IV) products to SC and expand SC-based CMO operations, observers say labor issues at Celltrion Pharm could affect the group's SC strategy and its competitiveness in future global bids.
Celltrion Pharm said, "We have not yet officially received specific proposals or demands from the union, but we will respect workers' rights guaranteed by law and engage in communication in accordance with relevant laws and systems."
The company added, "We are continuously adding staff in line with rising output and are currently hiring," and, regarding Celltrion development services, said, "We are steadily adding office and research positions as well."
Regarding concerns that labor conflict could affect quality trust and global bidding competitiveness, the company said, "We will do our best to prevent anything that would worry our partners."
◇Cheongju plant at 91% utilization…"70 million syringes" system with a 2 trillion won investment
On Jul. 2 in Asan, South Chungcheong, Celltrion Pharm President Yu Young-ho announced at the "Chungcheong region advanced industry development vision national briefing" that the company will invest a total of 2 trillion won to newly build PFS production facilities in North Chungcheong, expanding capacity from about 20 million syringes to 70 million syringes. Celltrion Pharm currently operates production facilities in Cheongju and Jincheon in North Chungcheong.
The investment will proceed in two phases. Starting design and groundbreaking in 2028 and targeting operation in 2032, 1 trillion won will be invested first, followed by an additional 1 trillion won depending on global demand.
The need for this expansion is evident in utilization rates. The biopharmaceutical filling line at the Cheongju facility, which holds GMP certifications in major markets, ran 190 batches out of an annual capacity of 208 batches last year, recording 91.3% utilization. This already exceeds the 90% level that the pharmaceutical industry considers a practical saturation threshold, taking into account maintenance and product changeovers.
Celltrion also plans to expand its product lineup from 11 now to 18 in 2030 and 41 in 2038. The company has recently in-housed hyaluronidase-based SC formulation technology, accelerating SC conversion for high-dose products. In addition, it is preparing a business to convert other companies' products into SC formulations.
◇Investment equal to 2.6 times total assets…"Pursued at the group level, funding undecided"
As of the end of the first quarter, Celltrion Pharm's total assets were 768.8 billion won. Of that, cash and cash equivalents held as bank deposits amounted to only 56.8 billion won, and last year's net income was about 38.7 billion won.
Given that it will be difficult to fund the investment with existing cash on hand, the market is citing corporate bond issuance, bank borrowing, and group-level financial support as likely financing options. Earlier, Celltrion said it would spend 300 billion won to build a new DP plant in Yesan, South Chungcheong, and invest 500 billion won in its Osong plant in North Chungcheong to meet rising PFS demand.
Celltrion Pharm said, "This is a new investment separate from existing plans," adding, "This investment is a group-level plan, and the specific funding method has not yet been decided."