Hovione to invest $80 million in the US, and it’s not because of Trump’s tariffs
The Portuguese company, which produces components for pharmaceutical products, is investing in strengthening the production capacity of its units in the US and Ireland. Seixal plant will open in 2027.
Portuguese company Hovione, which produces components for pharmaceutical products, is investing 80 million dollars (around 68 million euros) in strengthening the production capacity of its plant in New Jersey, in the United States, but the decision has nothing to do with Donald Trump’s tariff threats.
Generic drugs are exempt from the 15% tariffs negotiated with the European Union — although this is not entirely certain, notes Hovione CEO Jean-Luc Herbeaux — but Hovione makes products and molecules that will be used by pharmaceutical companies to manufacture medicines sold to consumers. With the United States accounting for 60% of the company’s sales, has the trade war impacted operations?
“Not really”, says Jean-Luc Herbeaux. “Distribution chains in the pharmaceutical sector are very complicated, they depend on equipment, specialised technologies… It’s a partnership, they have to trust you. So, for them, it’s not that easy to relocate. It’s not something they do willingly, it costs them a lot of money and there aren’t that many partners they can trust”, explains the company’s CEO to ECO, on the sidelines of a meeting to mark the awarding of the Léonard de Vinci prize, given for the first time to a Portuguese family business by the French association Les Hénokiens and the Château du Clos Lucé.
Strengthening production capacity in the US and Ireland
Hovione’s plant in Sete Casas, in the municipality of Loures, is the first and largest of the 66-year-old company’s production facilities, with presence in Macau, Ireland (Cork) and the United States (New Jersey), and which, in 2027, will add a new factory in Seixal.
It is in the North American unit that the company will invest in increasing production capacity. “We recently added [production] capacity in the United States. And we have ordered two new spray dryers for the United States next year. We are preparing for an international footprint that will allow us to be closer to our customers and patients”, says the CEO.
The company works with 19 of the 20 global pharmaceutical companies, and between 5 and 10% of new drugs approved annually in the US by the FDA contain components produced by Hovione. These components are part of medicines that reach around 80 million patients.
“We are investing in Portugal, Ireland and the US. It is important for the sites to be up to date and for us to provide the same experience [to customers]”, regardless of the location chosen for the production of the components of products later used in medicines, explains the CEO.
But is the investment in the US facility a plan B, in case Trump changes his mind about tariffs?
“Much of our investment is driven by customer decisions. We don’t choose where the drug is produced. We offer options and the customer chooses. So there will be one or two projects that will lead to new investment in Seixal and another in the US. We are starting to develop new collaborative partnership models in which we do business in a way that allows us to invest more quickly in the location chosen by our customers”, explains the CEO.
“The two new dryers we are going to order in 2026 [in the US] represent an investment of around 80 million dollars”, he reveals.
The same amount will be invested in the operation in Cork, Ireland. “We have already added capacity in the last six months and there will be a new wave, with the construction of two new dryers”, he says. An investment of “around 80 million” dollars.
Seixal facility to open in 2027
In Portugal, Hovione’s new facility in the country is scheduled to open in 2027. Is the date still valid? “We cannot invest without the pipeline to sustain the investment. We had to wait for that pipeline to become strong enough, and we have reached that point. We are accelerating the investment, which is why the new [opening] date has been made public. We have two buildings, one for spray drying and another for pharmaceutical products, and most of the installed capacity is already secured”, he pointed out. The investment remains at 200 million euros, as announced in 2019.
Operations will begin in 2026 with a team of 40 people, increasing to 100 once production starts. They will join the current 2,500 people at the company’s various sites.”On average, over the last five years, we have brought in 200 to 300 people per year”, said the CEO.
