Glaxosmithkline Share News (GSK)

* Pharmaceuticals manufacturing to be "robust" in 2018 - EDB

* Recovery seen from biggest annual contraction since 1993

* Firms eye automation, new technology to boost productivity(Adds February pharmaceuticals output data in paragraph 10)

By Masayuki Kitano and John Geddie

SINGAPORE, March 26 (Reuters) - Singapore's pharmaceuticalsbusiness, among the pillars of the city-state's manufacturingsector, is set to return to strength this year as big globaldrugmakers ramp up output and advance automation at theirproduction sites across the country.

A recovery from dismal 2017, which marked the sector's worstcontraction in two decades, would underpin Singapore's economicgrowth. Pharmaceuticals is the No.2 contributor to the country'smanufacturing output and accounts for 3 percent of its GDP.

The sector will see a "robust" 2018, Singapore's EconomicDevelopment Board (EDB) told Reuters.

"The opening of new sites like AbbVie's biologicsmanufacturing facility and the ramp up of others including Amgenand Novartis reflect strong fundamentals ...we expect the manufacturing activity to remain robust for 2018,"said Ho Weng Si, director of biomedical sciences for EDB.

"Outlook for the industry as a whole remains positive forthe next few years," Ho added, citing the pace of new drugapprovals by the U.S. Food and Drug Administration that hit a21-year high in 2017.

Singapore is well placed to benefit from this uptick inapprovals as it hosts facilities of eight of the world's top 10drugmakers - such as Roche, GlaxoSmithKline,Pfizer and Sanofi.

Sanofi, which in Singapore mainly produces ingredients forblood-thinning drugs shipped globally, told Reuters it expectsproduction "to be relatively stable to slightly increasing incoming years" as it invests to upgrade capacity.

A quarterly EDB survey of the manufacturing sector shows thepharmaceuticals industry is the most optimistic about productionover January-March, with a net weighted balance of 56 percent offirms expecting output to rise from the preceding three months.

EDB's Ho and the survey did not provide a specific forecast.

Data shows pharmaceutical production dropped in January,albeit at a milder pace, and rose 15.2 percent from a year agoin February, bringing gains so far this year to about 7 percent.

Output shrank 15.6 percent in 2017, the largest annualcontraction since at least 1993.

Singapore's pharmaceutical output has risen more thanthree-fold since the start of this century, with the sectorgenerating S$17 billion ($13 billion) worth of products lastyear.

ADVANCEMENTS IN TECHNOLOGY, AUTOMATION

The outlook for recovery, however, is not free of headwinds.

Output in pharmaceuticals is inherently volatile becauseproduction happens in batches, which can take anywhere from afew days to weeks to make.

But thanks to advancements in technology, industry playersare hoping to achieve more consistent production levels.

GSK, which has been manufacturing in Singapore for nearly 50years, has been pioneering a technology called continuousmanufacturing where instead of making products in batches,materials are constantly added and products removed.

Last year, for the first time products were commerciallymade using this technology.

"The pharma industry has to progress on the technology front... to ensure we increase productivity," said Lim Hock Heng, asite director in Singapore for GSK.

Mundipharma hopes to start commercial production ofantiseptics at its new plant in Singapore as early as the fourthquarter of 2019 - which according to CEO Raman Singh "will bethe most automated plant in the world compared to any othercompetitors".($1 = 1.3148 Singapore dollars)

(Reporting by Masayuki Kitano and John Geddie; Editing by JackKim and Himani Sarkar)