South Korea’s growing biopharmaceutical production capacity is increasingly making the country an attractive investment destination for global life science companies, industry sources said Thursday.

Since 2016, global pharmaceutical and biotech firms started building their research and development centers and production facilities in Korea, especially within the Songdo Bio Cluster in Incheon, where the biopharmaceutical production capacity has reached 1.2 million liters, the world’s largest followed by Massachusetts, San Francisco and Singapore, according to officials from the Incheon Free Economic Zone.

“As Songdo’s drug manufacturing capacity has increased over the past few years, the demand for drug materials and lab supplies also went up, opening up new opportunities for foreign life science companies to establish their research and development centers and manufacturing facilities,” an industry official said.

Songdo has successfully created an ecosystem for the bio-industry over the past few years, and it is now home to numerous international bio companies, with Korean biopharmaceutical giant Samsung Biologics being the key driving factor.

Samsung Biologics, one of the biggest contract manufacturing organizations globally, is believed to make up almost 60 percent of the CMO capacity within the cluster.

Korean biopharmaceutical company Celltrion has also long been situated within the bio cluster, contributing to boosting the ecosystem.

“The proximity to the world’s largest biomanufacturing facilities in Songdo has allowed foreign life science companies to generate stable revenue as companies like Samsung Biologics and Celltrion need a stable supply of materials and equipment for drug making,” the official said.

A series of foreign investments have been made in recent years.

Danaher’s Cytiva, the US bioscience company, opened its R&D center in Songdo in 2016 with a $7.9 million investment. The firm also plans to build a cell bag manufacturing facility and a warehouse there with a combined investment of some $53 million.

In 2020, US-based life science solutions provider Thermo Fisher Scientific built its R&D center in Songdo with plans to inject $6.5 million as part of its regional supply chain expansion.

Sartorius, the German pharmaceutical and laboratory equipment supplier, has also pledged $560 million to build its local facility featuring consumables and cell culture media production, as well as an application and training center with laboratories, services, logistics, and other operations.

German pharmaceutical giant Merck has also expanded its investments in Korea. In Songdo alone, it operates an R&D center and media manufacturing and distribution facilities.

Just last week, Merck Life Science announced that it will invest 300 million euros ($326 million) to build a new bioprocessing complex in Daejeon, its largest investment yet in the Asia-Pacific region.

“Even though Daejeon was the final destination, Songdo’s growing capacity is believed to have affected Merck’s fresh investment decision,” said another industry official close to the matter.