IOL Chemicals and Pharmaceuticals (IOL), a leading Indian ibuprofen API manufacturer, has approved an investment plan totaling INR 4.95 billion (about RMB 347 million). The company will add 6,000 tonnes/year of ibuprofen API capacity at its Barnala site in Punjab, raising total capacity from 12,000 tonnes/year to 18,000 tonnes/year, an increase of 50%. The new plant is expected to begin commercial production in December 2027.
IOL’s existing ibuprofen capacity is running at about 95% utilization, close to full capacity. The company currently accounts for about 30% of the global ibuprofen API market. Its production system covers key upstream intermediates such as isobutylbenzene, making it one of the few companies globally with an integrated ibuprofen supply chain.
Global ibuprofen API capacity is highly concentrated in China and India, which together account for more than 85% of global capacity, with China accounting for about 48% and India about 30%. China’s Xinhua Pharmaceutical currently has about 12,000 tonnes/year of ibuprofen capacity, about 33% of global capacity. Based on the current global capacity base, if IOL’s new capacity comes on stream as scheduled, its share of global capacity will approach 40%, further increasing concentration in ibuprofen supply.
The INR 4.95 billion (about RMB 347 million) investment is not all for ibuprofen. IOL also plans to invest INR 1.1 billion (about RMB 77.1 million) to build a formulation CDMO plant in Barnala, with a designed annual capacity of about 1.5 billion tablets. The plant has obtained GMP certification from Hungary’s National Center for Public Health and Pharmacy and will mainly undertake long-term contract manufacturing for European customers. It is expected to begin commercial operations in the third quarter of fiscal 2027. In addition, the company plans to invest INR 350 million (about RMB 24.5 million) to build a specialty chemicals contract manufacturing facility and exclusively supply an undisclosed international chemical company under a long-term agreement.
These moves show that while IOL is expanding its mature API business, it is also extending into formulation CDMO and specialty chemicals contract manufacturing. However, by investment amount and new capacity, ibuprofen remains the core of this expansion round.
Once the new plant is operational, IOL will further widen its capacity lead over Xinhua Pharmaceutical. IOL relies on isobutylbenzene integration, while Xinhua Pharmaceutical and other Chinese companies rely on full domestic supply-chain support. They will compete for annual long-term contracts from generic drug customers in Europe and the United States. After 2027, how well new capacity release matches downstream demand growth will directly affect ibuprofen API prices and long-term contract terms. Revenue contribution from European CDMO and specialty chemicals contract manufacturing will determine IOL’s sensitivity to ibuprofen prices.
