As global contract development and manufacturing organizations (CDMOs) ramp up competition for production bases in the United States, Samsung Biologics is once again facing concerns over its credibility with global clients due to a second strike announced by its labor union. The prolonged labor dispute could impact the company's ability to secure contracts and maintain trust, given the critical nature of delivery timelines and quality in the CDMO sector.
According to industry sources and foreign media reports on November 5, Swiss CDMO leader Lonza signed a contract on November 3 to acquire five CDMO facilities from Germany's Merck in the U.S. This acquisition will increase Lonza's U.S. production sites from four to nine and add approximately 1,100 employees, bringing its total workforce in the U.S. to over 6,000. Analysts suggest that the competition among global CDMOs for production capacity and locations is intensifying amid rising local demand in the U.S.
Samsung Biologics is also accelerating its efforts to secure production bases in the U.S. and expand into next-generation pharmaceuticals. This year, the company acquired GSK's facility in Rockville, Maryland, establishing a foothold in the world's largest pharmaceutical market. Additionally, it is pursuing the acquisition of peptide CDMO company Polypeptide Group for approximately 2.4 trillion won, the largest merger and acquisition deal in South Korea's pharmaceutical and biotech sector. The acquisition is expected to be completed by the first quarter of next year, allowing Samsung Biologics to broaden its business scope to include peptides.
The company has also seen continued success in securing contracts, with a cumulative order amount reaching $22.3 billion (approximately 30 trillion won) since its founding. This year alone, it has signed nine contracts based on public disclosures.
However, ongoing labor disputes have emerged as a significant variable for Samsung Biologics' growth. The Samsung Biologics Cooperative Union plans to initiate a second strike starting November 6, lasting three weeks until November 27. This follows a first strike that occurred six months ago. Approximately 400 members, primarily from quality control, quality assurance, logistics, and indirect support roles, are expected to participate. The union stated, "We plan to gradually expand our strike while adhering to the court's injunction against unfair labor practices."
The focus of this strike on indirect roles is due to a court ruling. The Incheon branch of the Seoul High Court decided on October 16 that the company could not disrupt the normal operation of nine key processes, from cultivation to bulk filling, with the usual workforce and operating hours. Violating this ruling could result in fines of 20 million won per incident.
The momentum for the strike is perceived to be weaker than during the first strike. While around 2,000 to 2,500 of the 4,000 union members expressed intent to participate in the first full strike, this time participation is expected to be around 400. Membership has declined from over 4,000 to approximately 3,800 due to resignations related to dissatisfaction with the collection of strike funds.
The company remains open to dialogue but believes that the union's hardline stance complicates the path to agreement. A Samsung Biologics representative stated, "Our willingness to reach an agreement through negotiations remains unchanged, but it may be difficult to achieve constructive dialogue and consensus while the union continues its aggressive actions, such as expanding the strike."
The two sides engaged in 13 rounds of negotiations from December last year to March this year but failed to reach an agreement. The union conducted its first full strike from May 1 to 5, which the company estimates resulted in a revenue loss of about 150 billion won. Biopharmaceuticals are produced through continuous processes from cell cultivation to purification, meaning that halting even a single process could necessitate discarding the entire batch being produced.
Industry insiders warn that if the strike prolongs while competitors rapidly expand their production capabilities, it could raise concerns about supply stability for existing clients and put Samsung Biologics at a disadvantage in securing new contracts.
According to industry sources and foreign media reports on November 5, Swiss CDMO leader Lonza signed a contract on November 3 to acquire five CDMO facilities from Germany's Merck in the U.S. This acquisition will increase Lonza's U.S. production sites from four to nine and add approximately 1,100 employees, bringing its total workforce in the U.S. to over 6,000. Analysts suggest that the competition among global CDMOs for production capacity and locations is intensifying amid rising local demand in the U.S.
Samsung Biologics is also accelerating its efforts to secure production bases in the U.S. and expand into next-generation pharmaceuticals. This year, the company acquired GSK's facility in Rockville, Maryland, establishing a foothold in the world's largest pharmaceutical market. Additionally, it is pursuing the acquisition of peptide CDMO company Polypeptide Group for approximately 2.4 trillion won, the largest merger and acquisition deal in South Korea's pharmaceutical and biotech sector. The acquisition is expected to be completed by the first quarter of next year, allowing Samsung Biologics to broaden its business scope to include peptides.
The company has also seen continued success in securing contracts, with a cumulative order amount reaching $22.3 billion (approximately 30 trillion won) since its founding. This year alone, it has signed nine contracts based on public disclosures.
However, ongoing labor disputes have emerged as a significant variable for Samsung Biologics' growth. The Samsung Biologics Cooperative Union plans to initiate a second strike starting November 6, lasting three weeks until November 27. This follows a first strike that occurred six months ago. Approximately 400 members, primarily from quality control, quality assurance, logistics, and indirect support roles, are expected to participate. The union stated, "We plan to gradually expand our strike while adhering to the court's injunction against unfair labor practices."
The focus of this strike on indirect roles is due to a court ruling. The Incheon branch of the Seoul High Court decided on October 16 that the company could not disrupt the normal operation of nine key processes, from cultivation to bulk filling, with the usual workforce and operating hours. Violating this ruling could result in fines of 20 million won per incident.
The momentum for the strike is perceived to be weaker than during the first strike. While around 2,000 to 2,500 of the 4,000 union members expressed intent to participate in the first full strike, this time participation is expected to be around 400. Membership has declined from over 4,000 to approximately 3,800 due to resignations related to dissatisfaction with the collection of strike funds.
The company remains open to dialogue but believes that the union's hardline stance complicates the path to agreement. A Samsung Biologics representative stated, "Our willingness to reach an agreement through negotiations remains unchanged, but it may be difficult to achieve constructive dialogue and consensus while the union continues its aggressive actions, such as expanding the strike."
The two sides engaged in 13 rounds of negotiations from December last year to March this year but failed to reach an agreement. The union conducted its first full strike from May 1 to 5, which the company estimates resulted in a revenue loss of about 150 billion won. Biopharmaceuticals are produced through continuous processes from cell cultivation to purification, meaning that halting even a single process could necessitate discarding the entire batch being produced.
Industry insiders warn that if the strike prolongs while competitors rapidly expand their production capabilities, it could raise concerns about supply stability for existing clients and put Samsung Biologics at a disadvantage in securing new contracts.
* This article has been translated by AI.
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