Daewoong Bio said it decided to invest 50 billion won ($39.3 million) in building a new cephalosporin antibiotics production plant in Korea.

The company plans to break ground for the plant in August in Hyangnam, Gyeonggi Province.

Daewoong Bio currently has a cephalosporin antibiotics plant in Seongnam but it will only be operational until 2024 due to outdated equipment.

Cephalosporin-based antibiotics have recently been evaluated as a less marketable business due to rising raw material prices and low drug prices.

Many pharmaceutical companies are considering withdrawing from the business, and global drug regulators have pointed out that the supply and demand shortage will become a serious issue.

However, Daewoong  Bio decided to buck the trend, for "strategic and public benefit purposes."

Using the investment, the company will focus on growing the scale of the business by doubling the production capacity at the new plant compared to the existing plant in Seongnam.

The increased capacity will  help stably produce and supply high-quality products that adhere to current good manufacturing practice (cGMP) regulations,  the company said.

Daewoong Bio plans to diversify its revenue model by responding flexibly to the demand caused by the global antibiotic shortage based on its increased production capacity.

"Daewoong Bio made a strategic investment decision to turn a crisis into an opportunity even in a difficult investment and market environment, and we will grow our antibiotics business to over 100 billion won," Daewoong Bio President Jin Sung-gon said.