How Is Merck Building a More Resilient Global Supply Chain?

Merck, a global leader in pharmaceuticals and life sciences, is taking a strategic approach to expand its presence in India and China by establishing regionalised supply chains.

This initiative allows Merck to leverage local manufacturing, reduce lead times and minimise dependence on global suppliers.

By setting up production facilities in China and India, Merck aims to capitalise on the robust manufacturing infrastructure these nations offer.

The move enables the company to source critical raw materials, such as active pharmaceutical ingredients (APIs), directly from local producers. With China and India responsible for over half of the world’s API production, this approach helps Merck ensure a steady and cost-effective supply chain.

This strategy is particularly important in the pharmaceutical sector, where supply chain resilience can significantly affect product availability. With the global demand for vaccines and essential medicines surging, Merck’s decision to invest locally enables faster delivery times and reduced transportation costs.

In a sector that heavily relies on timely procurement, these efficiencies are vital.

By decentralising its production, Merck is not only reducing the risks associated with over-reliance on distant suppliers but also increasing the stability and efficiency of its supply chain.

These localised supply chains are key in maintaining operational continuity during disruptions, as demonstrated by the global challenges faced during the COVID-19 pandemic.

Investment in custom manufacturing capabilities

Merck's investment in China and India goes beyond just sourcing ingredients. The company has poured resources into custom manufacturing capabilities, particularly in specialised areas like cell culture media production.

Merck’s facility in Nantong, China, highlights this commitment. This GMP-compliant manufacturing line for cell culture media is designed to meet local demand, offering customised solutions for Chinese customers.

Local production of cell culture media, essential for biopharma processes, means faster delivery times for customers in China, reducing the need to import these materials from overseas.

Merck’s investment also allows for smoother transitions from pilot projects to full-scale production, offering Chinese manufacturers the advantage of regulatory-compliant products that meet international standards.

“This investment further expands Merck's footprint and capabilities in China, showcasing our commitment to the development of the local biopharma industry,” comments Roy Wu, Managing Director of the Life Science business sector for Merck China. 

“The new cell culture media manufacturing line is a positive proof of our commitment to improve patient care by leveraging our innovative spirit and global network of expertise.”

As a result, Merck is well-positioned to meet the growing demand for high-quality cell culture products used in vaccine production and other biopharmaceutical innovations.

In India, Merck has expanded its footprint by opening manufacturing facilities aimed at supporting local pharmaceutical companies. By providing these companies with advanced filtration systems, chemicals and other essential materials, Merck is helping the local industry scale up its production capabilities while ensuring high standards of safety and quality.

This local support is particularly crucial as India continues to grow as a global pharmaceutical hub.

Tapping into local innovation ecosystems

Merck's long-standing presence in both India and China gives the company an edge in accessing local innovation ecosystems.

In China, for instance, Merck has established partnerships with local research institutions, which positions the company to stay ahead in biopharmaceutical research and development. Early access to new technologies and materials developed within these local ecosystems enhances Merck’s ability to innovate and meet evolving market demands.

This strategy also supports Merck’s broader goal of fostering innovation in global health. The ability to work closely with local suppliers and researchers allows Merck to improve procurement processes for cutting-edge solutions, which can be scaled globally.

As Merck continues to deepen its relationships in these markets, the company is better equipped to navigate the complexities of international pharmaceutical supply chains.

With India producing 62% of the world’s vaccines and China dominating the API market, these two nations are critical to Merck's global supply chain.

By tapping into local innovation and manufacturing power, Merck strengthens its position as a leader in the global pharmaceutical landscape.

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