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Cheap Chinese antibiotics threaten Europe’s last major penicillin plant

Tucked away in the green foothills of the Austrian Alps, the last fully integrated European penicillin plant faces an uncertain future in the shadow of rising Chinese industrial power.

The reason: China is churning out the same antibiotics and ingredients as the Sandoz factory in Kundl, Austria, at much lower cost for the European market.

The falling prices are a boon for cost-conscious European ​governments' public healthcare programs but an existential threat to the Kundl site - the only one making penicillin from start to finish in Europe, including key active ingredients.

After a number of peers announced they were closing or moving production to China, the plant has become a ‌focal point for a widening debate about the West's self-sufficiency.

VIDEO BY REUTERS

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Transcript
00:09This video is brought to you by the end of the day of the day of the day.
00:33So
01:07If we, as the last ones, would also move out, then we would be fully dependent on our competitors,
01:12which are in China and India.
01:15So that's why we also would like to keep that site here,
01:19really to make sure that we can, out of Kundal, supply Europe and the world with life-saving antibiotics.
01:44Out of this site, just maybe for the order and magnitude,
01:47we would be able to supply the full demand of antibiotics or penicillins in Europe.
01:52So we're bigger than all the demand, or our capacities are bigger than all the European demand would be.
01:57We're supplying out of Kundal into 100 different countries.
02:01We're supplying with our finished dosage forms about 250 million patients,
02:07and we're also selling our active pharmaceutical ingredient.
02:10And with this, we reach another 200 million patients.
02:22We consume as much energy as the city of Innsbruck.
02:25The city of Innsbruck, about 100,000 plus-minus inhabitants.
02:30So the energy consumption is really rather high.
02:33And we all know what happens to energy prices during the different geopolitical crisis 2022,
02:39the Ukraine crisis, and also now the Middle East crisis,
02:42we saw that energy prices were really going up or even tenfold higher at peak times
02:47than, let's say, before the Ukraine crisis started.
02:50And so that is, of course, hitting us very hard.
03:02That is also something where we have a clear disadvantage versus our competitors.
03:08Most competitors in China and Asia have their own power plant.
03:11So next to the antibiotics production, they have their own power plant,
03:14a coal plant or whatsoever.
03:24They have their own power plant, a coal plant, a coal plant, and a coal plant.
03:26Thank you, buddy.
03:27Thank you, buddy.

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