Novartis suspends commissioning of new Russian plant

Swiss pharma major Novartis (NOVN: VX) has decided to suspend the commissioning of its new Russian plant, which is currently being built in the St Petersburg region for at least a year, reports The Pharma Letter’s local correspondent.

According to the company’s announcement, the commissioning of the plant, which is located in the Novoorlovskaya special economic zone of St Petersburg and which should have been completed in the third quarter of the current year, is postponed for at least a year. Total investment in the project is estimated at 4.5 billion roubles ($140 million). The new plant should have the capacity to produce 1.5 billion tablets a year and is located on a 10.05 hectares site, aimed at providing high-quality generics and innovative pharmaceuticals for Russian patients. Construction started in 2011, and the project was part of the company's five-year $500million investment plan (TPL December 20, 2010).

According to an official spokesperson for Novartis Russia, the main reason for the suspension of the project is “technical problems.” However, according to some sources close to the Russian Ministry of Industry and Trade, among these reasons are sanctions imposed on Russia by the West and a generally unfavorable investment climate in the country.