Major Corporations Seeking Future Food Sources, Entering Pharmaceutical Bio and Health Sectors One After Another

Lotte Accelerates Business Expansion at General Meeting
70 Billion Won Investment, Platform Construction Plans
Hyundai Heavy Announces Support for Future Industries
New Corporation AmcBio Established Last Year
OCI Invests 146.1 Billion Won in Bukwang Pharm
Industry Expects Expansion of Industrial Pie
"Positive Role Expected from Large Corporations' Participation"

[Asia Economy Reporter Lee Gwan-joo] With the goal of "nurturing future growth engines," major domestic conglomerates have been consecutively announcing their entry into the pharmaceutical bio and healthcare industries. Their strategy is to strengthen their position not only through direct group-level investments and active mergers and acquisitions but also through collaboration with existing startups and venture companies. The pharmaceutical bio industry generally welcomes this trend. It is expected that the overall status of the industry will rise with the entry of capital-rich conglomerates, and their voices will be amplified in the government policy-making process.

◇ New Growth Engines in Bio and Healthcare = Lotte Group officially announced its entry into bio and healthcare at the shareholders' meeting held on the 25th of last month. Lotte Holdings CEO Lee Dong-woo stated that Lotte Holdings plans to directly invest in and nurture bio and healthcare sectors. The business is led respectively by the newly established ESG Management Innovation Office's New Growth Team 2 (Bio) and New Growth Team 3 (Healthcare), created last August. Specifically, they plan to invest 70 billion KRW to establish Lotte Healthcare Corporation and build a platform that provides comprehensive solutions across all areas of health management, including diagnosis and prescriptions. The bio business is also reportedly exploring various ways to create synergy with external capabilities.

Hyundai Heavy Industries Holdings changed its name to HD Hyundai on the 28th of last month and announced plans to support new businesses in four future industries including healthcare and subsidiaries' new businesses such as white bio. Last year, they established a new corporation, Amc Bio, to pursue new businesses like new drug development, and acquired Mediplus Solution, a mobile healthcare company. Additionally, they formed a fund worth 34 billion KRW with Mirae Asset Group to discover promising venture companies.

OCI also began full-scale entry into the pharmaceutical bio business by investing 146.1 billion KRW in Bukwang Pharmaceutical last month and becoming its largest shareholder. On the 15th of last month, they announced plans to continuously secure research and development platforms through collaboration and investment with bio companies. They invested 5 billion KRW each in SN Bioscience, a company developing nano drug delivery systems, and Panoros Bioscience, which develops multi-target cancer antibody therapies. They also invested 5.5 million USD (about 6.7 billion KRW) in Israeli early cancer diagnosis company Nucleix, and 7.8 million USD (about 9.4 billion KRW) in US-based Adicet, a developer of immune-oncology cell therapies.

SK Chemicals set a goal to invest more than 600 billion KRW in pharmaceutical bio by 2025 and achieve sales exceeding 1 trillion KRW. This includes new drug development through open innovation, building a new drug discovery platform using artificial intelligence (AI), investing in promising ventures, and securing pipelines. They are particularly focusing on new bio areas such as cell and gene therapies.

Interestingly, all these conglomerates share the characteristic of handling heavy and chemical industries. An industry insider commented, "It is somewhat natural for conglomerates to seek new growth engines," and analyzed, "Given that Samsung, SK, and others have already entered and achieved results, it seems that positive prospects for the bio industry are being reflected."

◇ Industry: "An Opportunity to Grow the Industrial Pie" = The existing industry is showing a generally positive response to the series of pharmaceutical bio entry announcements by conglomerates. First, the participation of capital-rich conglomerates could accelerate new drug development. There is also an expectation that government interest and emphasis will increase through conglomerate participation in the pharmaceutical bio policy-making process. An industry official said, "The participation of conglomerates can play a positive role in the virtuous cycle where interest in the industry leads to government policies, processes, and the inflow of funds."

There are also calls for conglomerates to demonstrate perseverance and effort to create success stories. A chronic problem in the domestic pharmaceutical bio industry is the lack of capital, which often leads to technology transfers or development halts despite having technological capabilities, resulting in slow accumulation of successful experiences. A mid-sized pharmaceutical company official said, "Completing the entire process from new drug development to clinical trials and product approval is truly a long and difficult journey," adding, "Not all developments will succeed, but we hope that increasing success cases will lay the foundation for future industry development."

This content was produced with the assistance of AI translation services.