TOKYO -- Chiyoda has won a roughly 5 billion yen ($42.1 million) order to build a production plant for injectable cancer drugs, the fruit of an effort to boost non-energy-related sales as crude oil prices flag.
The Japanese general contractor will begin construction in October on a new building at a Cmic Holdings facility in Tochigi Prefecture. Plans call for bringing the new plant online by the end of 2018, increasing Cmic's output capacity tenfold to an annual 1.2 million vials. Demand for injectable solutions is booming with the development of more cancer drugs.
Pharmaceutical facilities account for just 5%, or about 30 billion yen, of Chiyoda's sales. The company aims to raise the figure by 70% to about 50 billion yen in fiscal 2018 -- five years sooner than originally planned. Engineers involved in pharmaceutical plants will increase 25% by fiscal 2018 to about 250. The larger team will be able to handle eight projects at once, up from the current five.
Chiyoda has also won a 5 billion yen-plus contract to build a facility for drugs derived from induced pluripotent stem cells, or iPS cells, an expected growth field.
Pharmaceutical facilities need sterile rooms and other sealed-off spaces, as well as such special features as carefully planned climate control systems. Chiyoda hopes that its strength in detailed project management will help it land similar deals in the future.
Around 90% of Chiyoda's total sales come from energy-related facilities, such as liquefied natural gas plants and oil refineries. But many companies are scaling down such investments in the face of declining resource prices. U.S.-based Anadarko Petroleum and partners have delayed final decisions on a Mozambique gas field project for which Chiyoda would handle construction.
The market for pharmaceutical plants is expected to expand 25% in fiscal 2015 to more than 500 billion yen. In addition to iPS-related treatments, companies will likely boost production of generic drugs.