Chemicals and energy firm OCI has announced that it would enter the pharmaceutical and biotech market by setting up a joint venture with Bukwang Pharm.
The two companies held board meetings on Wednesday and agreed to establish a 50-50 joint venture for pharmaceutical and biotech businesses.
The two will start the joint venture in July to carry out various projects including discovering new drug candidate substances, developing new drugs, and investing in equities of promising venture firms.
To push the project, the two companies will spend more than 10 billion won ($9.2 million) a year together.
OCI said it would join the pharmaceutical and biotech market through collaboration with Bukwang, which has accumulated expertise from development to manufacturing.
OCI, the world’s second-largest manufacturer of polysilicon, the essential material in solar power generation, developed polysilicon in 2008 for the first time in Korea. The company has advanced technological power to produce ultra-pure polysilicon with the purity of more than 11N, which is on a par with semiconductors in purity.
OCI has also been accumulating expertise in the chemical industry since engaging in pesticide and reagent business in the 1970s.
“It is meaningful that with Bukwang Pharm, OCI is entering the pharmaceutical and biotech industry, which is regarded as a future growth engine for Korea with high added value,” OCI CEO Lee Woo-hyun said. “I hope that Bukwang’s experience and capacity in open innovation will create strong synergy with OCI’s chemicals manufacturing capability.”
Bukwang Pharm CEO Yoo Hee-won also said, “I am pleased that we will establish a joint venture with OCI, the global leader in chemicals and solar power, to develop new drugs. By diversifying the business portfolio with OCI, we will enhance our new drug development business.”
To solidify the partnership, OCI signed a contract on Wednesday to purchase Bukwang’s 1,510,786 shares, or 3.09 percent of the securities, in off-hour block deal.
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