This new facility is a strategic move to support growing demand in the pharmaceutical industry, particularly for vaccines, biologic therapies, and the so-called glucagon-like peptide-1 (GLP-1) medications. Balázs Károly Vizi, head of regional operations bulk solutions in Europe at Schott Pharma, spoke to the Budapest Business Journal about the project.

BBJ: What is the recent investment in Lukácsháza?

Balázs Károly Vizi: We expanded our existing production site with a new facility for prefillable glass syringes from our syriQ and syriQ BioPure product families. The products are used to safely store and administer vaccines and biologic therapies, as well as GLP-1 medications, which primarily treat type 2 diabetes and obesity. We also added new work office spaces to the building. We plan further multi-million euro investments in Hungary in the coming years.

BBJ: Why choose Lukácsháza for this investment?

BKV: One reason was to build on the solid foundation and skillset created at the site over the past 30 years. In addition, we are supporting market growth for prefillable syringes and strengthening our competitiveness in Europe. We also create supply security for our high-value solutions for major pharmaceutical companies and contract manufacturing organizations worldwide.

BBJ: How does this facility in Hungary complement your capabilities in Switzerland and enhance your ability to meet the growing demand for pre-fillable glass syringes?

BKV: Besides Switzerland, Hungary is the second hub for prefillable glass syringes in our worldwide production network. It adds to the capacity by executing the company strategy to increase high-value solutions to more than 60% in the mid-term and supporting key pharma trends such as GLP-1, homecare solutions, and personalized medicine.

BBJ: What pharmaceutical trends will you support with this production facility? And how does the investment align with broader trends in the pharmaceutical industry, such as the rise of biologics and mRNA vaccines?

BKV: We closely follow the prevailing trends in the healthcare landscape, like personalized medicine, homecare solutions, or vaccines and GLP-1 therapies, which significantly influence our product development endeavors. Our dedication to innovation in drug containment solutions and delivery systems aligns with these trends, ensuring we continue to meet the evolving needs of patients, healthcare providers, and the broader industry.

BBJ: What types of jobs will be created by this investment?

BKV: The new facility will bring more than 120 jobs to the region. Being close to Szombathely and to the Austrian border, skilled labor is abundant in the area. The jobs will be 85% blue-collar and 15% white-collar. We have already started recruiting processes and hired more than 100 new employees. From our plant in Lukácsháza, we supply products to global pharmaceutical players and contract manufacturers. This also includes a range of pharmaceutical companies in Hungary.

BBJ: What role did the Hungarian Government play in facilitating this investment?

BKV: Schott Pharma received HUF 3.321 bln (EUR 9 million) in funding from the Hungarian Government, with the support of the Hungarian Investment Promotion Agency. With our more than three-decades-long presence in Hungary, we have been committed to serving the healthcare needs of the Hungarian people, contributing to the advancement of the region’s pharmaceutical industry, protecting against future shortages of critical drugs, and ensuring pandemic preparedness. The subsidy from the Government will further enhance our operations and strengthen our commitment to the Hungarian market.

BBJ: What sustainability measures have you implemented in Lukácsháza?

BKV: Sustainability is a core focus. Our goal is to become climate-neutral by 2030, and we are committed to reducing our environmental footprint through a range of initiatives. For example, the new facility is powered by 100% green electricity. Furthermore, we are working on initiatives to implement energy-efficient technologies in our manufacturing processes, reduce waste, improve our supply chain to minimize carbon emissions and collaborate with suppliers to source sustainable materials and packaging. Of course, we also run regular audits and assessments to monitor and improve our environmental performance.

BBJ: How do you plan to address any potential supply chain and logistics challenges?

BKV: Our strategy focuses on manufacturing close to our customers, reducing transport times and costs, and ensuring faster and more reliable deliveries. We continually optimize our logistics operations to maintain a robust and flexible supply chain for our customers worldwide. We also source our primary raw material, glass tubing, directly from our parent company, ensuring consistent quality and reducing dependence on external suppliers. Together, these measures enable us to meet our customers’ needs with high-quality products delivered on time.

BBJ: How do you collaborate with local educational institutions to ensure workforce development?

BKV: We are in close contact with local schools and universities, particularly concerning dual education programs and dual apprenticeships. Our philosophy is to support and develop our future workforce locally. We regularly allow school classes to visit our factory. In addition, our experts visit neighboring schools and give educational talks to share insights into our work and our passion for glass and patient safety.

BBJ: What are Schott Pharma’s long-term goals in Hungary?

BKV: Our overall ambition is to fully capture the accelerating demand for high-value solutions that offer specific added value to the customers. These will boost our profitability and expand our market share. We see two primary drivers: innovation and expansion. The innovation pillar identifies future market trends and translates them into products that can contribute to our customers’ success. The expansion pillar focuses on strengthening our global market presence and meeting high demand by executing growth projects. This site in Hungary is just one example. Across all regions, we are either expanding existing capacity at our plants or paving the way for new manufacturing sites. Overall, we aim to enhance our sustainability efforts and leverage cutting-edge technologies to improve drug containment and delivery solutions to meet evolving healthcare needs.

The healthcare sector, with its ability to create added value and generate highly skilled positions, remains a priority for Hipa, as seen from its figures.

Between Jan. 1 2014 and Dec. 31 2023, Hipa guided 2,123 projects worth some EUR 49 billion to create more than 150,000 new jobs. In 2023, the previous investment record, set in 2022, was doubled with 209 projects generating investments worth EUR 13 billion. The figures for healthcare in the same period are: 44 projects, worth almost EUR 1.3 bln, creating more than 5,100 new jobs.

Based on those projects managed by Hipa since 2014, the United States, France and Germany are the most important countries with regard to healthcare FDI. In recent years, Hungarian investors have become more active in the sector.

This article was first published in the Budapest Business Journal print issue of July 12, 2024.