Lotte Fine Chemical announced on Oct. 7 that it has entered into a global distribution agreement with Colorcon, the world’s leading distributor of pharmaceutical cellulose based in the USA. The agreement, valued at $1 billion, entails the sale of Lotte Fine Chemical’s high-value specialty pharmaceutical cellulose products through Colorcon in the global pharmaceutical market for the next 10 years.
Pharmaceutical cellulose, a plant-based material made from wood pulp, is used as a coating for tablets and as a raw material for capsules. Lotte Fine Chemical is currently expanding its pharmaceutical cellulose plant with an investment of 79 billion won, expected to be completed by next year. Upon completion, the company will become the world’s leading manufacturer of pharmaceutical cellulose, up from its current position as the second-largest based on production capacity.
Colorcon, headquartered in the USA, is the world’s leading distributor of pharmaceutical cellulose and a tablet coating material company. With over 60 years of experience, it supplies pharmaceutical materials to global pharmaceutical companies through 27 global locations. Under this agreement, Colorcon will exclusively distribute Lotte Fine Chemical’s products to its pharmaceutical cellulose customers for the next 10 years.
Pharmaceutical cellulose is a high-value market within the specialty business, characterized by high technical barriers. Supplying new products to pharmaceutical companies requires approximately two years of product testing and various certification processes. This agreement with Colorcon signifies a foundation for Lotte Fine Chemical to sell its expanded production volumes and further increase production.
The demand for plant-based pharmaceutical materials is rapidly growing, replacing traditional animal-based materials like gelatin, driven by aging populations and the expanding health functional food market. Lotte Fine Chemical anticipates an additional revenue of 1 trillion won over the next 10 years from pharmaceutical cellulose and related pharmaceutical materials through this agreement.
Kim Yong-seok, CEO of Lotte Fine Chemical, stated, “This long-term partnership between the world’s leading manufacturer and distributor of pharmaceutical cellulose is significant. Collaborating with Colorcon, which has supplied pharmaceutical materials for over 60 years, will be a stepping stone for us to become the world’s leading manufacturer after the expansion is completed next year.”
Simon Tasker, CEO of Colorcon, said, “We are pleased to combine Lotte Fine Chemical’s high-quality manufacturing technology for pharmaceutical cellulose with Colorcon’s over 60 years of supply stability and technical support capabilities. Through our cooperation, we will provide greater value to our global pharmaceutical and health functional food customers.”
Source: businesskorea.co.kr
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