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Hungary's Richter to build $103.7 mln biotech plant

Hungarian drug producer Richter Gedeon will build a biotechnology plant in Debrecen, eastern Hungary, at a cost of Ft 15 billion ($103.7 million), the company said.

Richter said the plant, which will be built using unspecified government subsidies, will start producing samples for clinical testing in 2012 and enter production in 2014.

The plant, which will employ 110 people, will be involved in mammalian-based cell fermentation and will manufacture products using both its own research and in cooperation with other drug firms, the company added.

“This will be just the third plant in Europe with this complexity and modernity,” Economy Minister Gordon Bajnai told a news conference.

Bajnai said the government will announce the specific subsidy 60 days after signing a contract with Richter but the firm will receive both cash and non-cash support, which will be in line with similar investments.

Richter declined to provide sales and earnings guidance for the plant and said it would provide more detail later.

Richter Chief Executive Erik Bogsch said the investment is necessary for the survival of the company as biotechnology is a key area for innovation.

“I think no drug firm will be competitive in five to ten years if it doesn't invest in biotechnology... Biotechnology is an area where a drug firm just has to be present,” Bogsch told a news conference.

Richter announced earlier that it would invest in a new biotechnology plant but had not given specific detail on the plans until Tuesday.

In August 2007, Richter acquired for €22.9 million a stake in a biotechnology firm from Germany's Helm AG, which specializes in bacterial recombined product. (Reuters)