At the groundbreaking ceremony of Novartis' Pharma tablet manufacturing S$310 million (€144 million) facility, Philip Yeo, chairman of the Agency for Science, Technology and Research, which is tasked with promoting the biomedical industry, said drug makers worldwide face strong competitive pressure this year.
When asked by reporters for a forecast for Singpore's biomedical output for this year, Yeo replied: "It will be flat. You can't keep growing at 30 per cent or something every year."
Yeo, however, emphasised Singapore's long-term target of increasing biomedical output, compromising pharmaceuticals and medical devices, to S$25 billion dollars by 2015 from S$15.8 billion dollars in 2004.
The comments made by Philip Yeo are a far cry from the remarks made by Singapore's deputy Prime Minister Dr Tony Tan, who thought 2005 growth was expected to be modest as various biomedical science plants settle down after the significant ramp up in capacity over the past few years. He also set an employment figure to hit 15,000 by 2015.
The projections for Singapore's economic model took a further knock after US hard-disk drive maker Maxtor Corp said it would move one of its two Singapore plants to China slashing up to 5,500 jobs at its Singapore operations.
Singapore's pharmaceutical manufacturers, mostly made up of Western multinationals, are not only facing competition from generic drug makers in China but also from India and South Korea.
Singapore has focused on pharmaceutical companies and medical device makers in recent years to diversify its economy amid competition from lower-cost economies like China and Vietnam. Companies with manufacturing operations in the city-state include GlaxoSmithKline and Merck.
Novartis' new plant will see them investing approximately $180 million to construct the plant. When fully operational, the plant and distribution centre are expected to employ more than 150 people and focus on bulk production of new and existing Novartis pharmaceutical products. Interestingly, it will be built in an area right next to a factory owned by US rival Pfizer
Swiss giants Novartis already have a significant presence in Singapore, which already includes the Novartis Institute for Tropical Diseases, Novartis' regional headquarters for its Pharmaceuticals, Sandoz and Medical Nutrition businesses, and the contact lens manufacturing plant of Novartis' subsidiary, Ciba Vision.
An expansion in plant capacity at drug firms such as Novartis and Schering-Plough helped the biomedical industry grow nearly 40 per cent to S$15.8 billion in 2004. This represents nearly nine percent of the island's $110 billion economy and the industry's share would rise to around 14 percent within 10 years based on the current size of the economy.
Six of the world's top drug makers operate in Singapore, along with hundreds of smaller biotech firms specialising in everything from stem cell research to studies of flu viruses.
GlaxoSmithKline established a preclinical research facility for neurodegenerative diseases in Singapore. This was GSK's first such facility in Asia Pacific and Singapore's third pharmaceutical corporate R&D centre, the others being Novartis (Switzerland) and Eli Lilly (US).
Pfizer opened its multi-purpose manufacturing facility, making Singapore home to its first large-scale active pharmaceutical ingredient manufacturing plant in Asia.