| By Daisy Zhang, Asia Manufacturing Pharma |
| Tuesday, 10 June 2008 |
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Yangtze River Pharmaceutical Group’s wholly-owned subsidiary Jiangsu Haici Biological Pharmacy Co., Ltd, for the first time, took booth space at the 60th API China & Interphex China recently held in Dalian, a clear sign that the company intends to expand into the active pharmaceutical ingredient (API) sector.
As China’s leading preparations manufacturer, Yangtze River Pharmaceutical Group has outperformed its domestic peers in terms of sales revenue for several consecutive years. Statistics show that the company recorded a year-over-year growth of 20.3 per cent in sales revenue in 2007. |
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When asked for the reason for the company’s planned entry into the API market, Deputy General Manager Zhang Minzhong said Yangtze River Pharmaceutical is a large-scale preparations producer and this makes it imperative for the company to be capable of producing APIs in house. |
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A number of major Chinese pharmaceutical companies have expanded their product lines to include APIs in recent years mainly for the purposes of establishing a top to bottom industry chain and freeing themselves from wide price fluctuations, according to an insider.
Yangtze River Pharmaceutical’s executives note that, with two existing API manufacturing workshops and over 100 production licenses, the company has inherent advantages in API production. However, as its production facilities for preparations could not meet the strict environmental requirements for APIs, combined with the company’s decision to separate production of traditional Chinese medicine preparations, chemical preparations and APIs, Yangtze River Pharmaceutical began to establish a new manufacturing facility in Taizhou in 2004 specializing in the production of APIs.
Yangtze River Pharmaceutical’s addition of APIs into its production line is part of the company’s adjustment of its product mix, thus facilitating its international |
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expansion, said Wu Huifang, chief researcher of Healthoo.com.
The company has now become a major preparations provider in China, and extending its offerings to include APIs is a strategic move in terms of the company’s foray into international markets rather than solely for internal use, Wu added.
Some insiders, however, are not upbeat about Yangtze River Pharmaceutical’s business expansion. They said the preparations maker should focus on its expertise and core products, as it is difficult for a new player to differentiate itself in the highly competitive API market, which is flooded with well-established competitors.
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