Novartis AG (NVS) has inked a deal with the City of St. Petersburg to construct a new full-scale pharmaceutical manufacturing plant, part of its $500 million commitment to invest in Russia’s local infrastructure and collaborative health-care initiatives over the next five years.

A part of Novartis’ effort to become Russia’s leading health-care partner in support of governmental health-care reform, the deal deepens the Swiss-based company’s multi-year commitment in the emerging market, including local manufacturing, research and development partnerships and public health development.

"Novartis is making a strategic investment in Russia for long term growth,” said Novartis CEO Joseph Jimenez. “This collaboration shows our commitment to contributing to the ambitious healthcare goals of the Russian government.”

Once completed, the St. Petersburg site will be a modern, state-of-the-art manufacturing plant, making both high-quality branded generics as well as pharmaceuticals, with an estimated production capacity of 1.5 billion units a year.

Expected to be one of the largest investments by Novartis in local manufacturing, the plant will serve the needs of the Russian market and eventually other global markets, enabling the transfer of cutting-edge technologies and skills to the Russian Federation.

Construction is slated to start in 2011, and Novartis said it plans on concurrently expanding its investments in R&D and public health collaborations in alliance with the Russian government, including collaborations with universities and academia, emerging Russian private businesses in different areas of medical science, and investments in drug development in clinical trials.

Follow Jennifer Booton on Twitter at @Jbooton