| By Cindy Wu, Asia Manufacturing Pharma |
| Monday, 11 May 2009 |
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Benefiting from an early and effective move aimed at reducing inventories, the Chinese government’s economic stimulus package and the slowly rebounding international demand, China’s chemical active pharmaceutical ingredient (API) segment showed signs of recovery during March, with export volumes at some manufacturers in the segment surging more than 30 percent compared with February. However, consensus expects the sector to face a number of uncertainties in the second quarter of 2009.
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Statistics from the National Bureau of Statistics of China show that the Chinese pharmaceutical sector’s revenues and earnings for the first two months of 2009 grew 16.4 and 19 percent to RMB111.8 billion (US$16.4 billion) and RMB10.3 billion (US$1.5 billion) respectively.
The worst performer among all the segments in the sector was the chemical API segment, whose growth rates of both revenues and pre-tax |
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profits for the first two months stood at seven percent. In addition, the total export volume of China-made chemical APIs for the two months dropped 12.7 percent from a year earlier, according to the bureau.
The results were in line with expectations as well as acceptable due to the expected lag of the global economic recession’s impact on the pharmaceutical sector and the traditional off-season during January and February, said an industry insider.
Furthermore, the chemical API segment’s domestic sales and export volumes have risen sharply and beaten expectations since March.
The rebound has also benefited from Chinese API manufacturers’ coordination in lowering their production volumes to maintain the steadiness of prices for chemical APIs, in particular for penicillin industrial salt, vitamins, and antipyretic analgesic drugs. Looking into the future, China’s new medical system reform, which involves a tota |
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investment of up to RMB1.5 trillion (US$220 billion), is expected to be another major driving force for the Chinese chemical API segment’s growth as most of the bulk APIs can be used for the manufacturing of drugs covered by the reform.
Nevertheless, an analyst warned, uncertainties remain in the segment as inadequate operating capital, new good manufacturing practice (GMP) requirements, the Chinese government’s increasingly strict environment protection standards and rising energy prices may hold back the segment’s recovery during the second quarter of this year.
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