| By Daisy Zhang, Asia Manufacturing Pharma |
| Tuesday, 10 June 2008 |
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Thanks to price increases for its main products, North China Pharmaceutical Group Corp. (NCPC), China’s largest and the world’s second largest penicillin manufacturing facility, recently reported solid financial results for the first quarter ended 31 March 2008, with core business revenue posting a year-on-year increase of 21% to some RMB1.1 billion (approximately USD15.9 million), on net profits of RMB19.2 million (approximately USD2.8 million), up 25.9% from a year earlier. |
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As a major antibiotics manufacturing facility in China, NCPC, whose total output of antibiotics active pharmaceutical ingredients (APIs) accounts for some 15% of the country’s total, has reached an annual production capacity of 2.2 billion doses of powder preparations, making the facility the country’s number one producer. |
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In 2007, measures put in place by NCPC to cope with adverse factors to the company’s operation such as rising prices for raw materials and the appreciation of the yuan, combined with the producer’s move to expand sales of its penicillin industrial salt and vitamin product offerings which were witnessing price rises, helped the company return to a net profitable status.
At present, moves by Indian makers to cut production of penicillin industrial salt as well as the environmental protection restrictions being put in place by the Chinese government, have resulted in a tight supply of penicillin industrial salt, leading to a price uptrend. During the first quarter of 2008, the price of penicillin industrial salt had skyrocketed to USD16-17/BOU in China, up 100% from the end of 2007.
Statistics show that China’s exports of penicillin industrial salt to India make up 85.1% of the country’s total exports in 2007. |
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As a result, the pricing trend for China’s industrial salt still depends, to a certain extent, on global demand.
NCPC is also looking at other opportunities. In addition to potential increases in margins from its optimized production lines, the company announced in 2006 plans to set up a joint venture with Netherlands-based DSM, the largest API manufacturer in Europe, which, upon regulatory approval, will be accretive to NCPC’s profits, said analysts.
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