| By Daisy Zhang, Asia Manufacturing Pharma |
| Monday, 16 June 2008 |
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Beijing Double-Crane Pharmaceutical Co., Ltd. announced on 10 June that the company will acquire a combined 90 per cent stake in Guangdong Shenzhou Pharmaceutical from Guangzhou Zhensheng and Foshan Nanhai Jinda Precision Casting for the nominal sum of RMB2 (approximately US$0.30). The pharmaceutical company also will provide a loan of RMB87 million (approximately US$12.6 million) to loss-making Shenzhou Pharmaceutical. |
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Upon completion of the proposed transaction, Shenzhou Pharmaceutical will become Beijing Double-Crane Pharmaceutical’s infusion solutions manufacturing facility in southern China.
Shenzhou Pharmaceutical recorded core business revenue of RMB71,300 (approximately US$10,300) and net loss of RMB9.96 million (approximately US$1.44 million) for the first three months of 2008, while, as of 31 March 2008, its debt stood at RMB142 million (approximately US$20.5 million).
Beijing Double-Crane Pharmaceutical will continue to increase its |
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investment in soft packaging materials for infusion solutions this year, as part of its future development strategy.
Foshan, Guangdong province-based Shenzhou Pharmaceutical is one of China’s largest drug makers specializing in the production of non-PVC large-volume infusion solutions in soft packaging, with an annual capacity of 50 million bags. For this reason, acquiring a stake in Shenzhou Pharmaceutical is a perfect fit to help Beijing Double-Crane Pharmaceutical diversify its businesses and product offerings and strengthen its presence in southern China’s infusion solutions market.
Non-PVC soft bags, which are widely used for infusion packaging in the US and Europe, are more friendly to the environment compared to glass and PE/PP bottles as well as the PVC bags currently prevalent in China. Usage of non-PVC infusion solutions in soft packaging not only meets international standards, but also narrows the gap between Chinese infusion packaging manufacturers and their peers in developed countries. In addition, the transition to non-PVC soft bag packaging will have a far-reaching effect on the country’s health care sector. |
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Beijing Double-Crane Pharmaceutical increased its production capacity of plastic infusion bottles by 235 million with the capital raised from a private placement in 2007. The increased capacity has helped the drug maker see higher profits and enhanced core competitiveness. The pharmaceutical company’s large-volume infusion solutions business recorded a growth of 30 per cent in revenue in 2007, while the gross profit margin increased 3.5 percentage points to 38 per cent for the year. In 2008, the company is expected to benefit from the Chinese government’s reform of the country’s medical system.
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North China Pharmaceutical reports improved financial results for first quarter 2008 due to price increases for main products
Suzhou, a major manufacturing base for China’s pharmaceutical industry
Central China’s largest injection production facility located in Wuhan
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