| By Cindy Wu, Asia Manufacturing Pharma |
| Tuesday, 30 June 2009 |
 |
Shijiazhuang, Hubei province-based CSPC Pharmaceutical, a Chinese leading manufacturer and
|
|
distributor of APIs, is undertaking transformation plans to enter the preparation sector. During the first four months of 2009, the company recorded an impressive after-tax revenue of RMB2.6 billion (approx. US$381 million), a year-on-year increase of 2.2 percent, and net profits of RMB410 million (approx. US$60 million), 48 percent higher than the same period of the last year, with accumulated exports of RMB140 million (approx. US$21 million), up 16 percent year-on-year by expanding operations both within and outside of China and investing in superior management and technology innovations.
After reaping RMB10 billion (approx. US$1.5 billion) in sales across all of its operations, CSPC Pharmaceutical decided to transfer its business focus from APIs to preparations, especially in the OTC sector, and undertake a series of strategic adjustments, aimed at gaining sales of RMB5 billion (approx. US$735 million) from
|
|
|
preparation markets. In referring to the transformation, CSPC Pharmaceutical chairman Cai Dongchen said, bulk chemical API industry has relatively lower barriers to entry, resulting in a large number of competitors jumping into the fray, which in turn brings on a surplus of production capacity and low-level price wars.
Moreover, APIs belong to the upper reaches of the industrial chain, while the vast majority of profits from pharmaceutical products reside in the preparation markets--the lower reaches of the industrial chain.
At the same time, new medical reforms put in place by the Chinese government to overhaul the structure of the domestic medical market will drive the growth in demand for preparations directly, with domestic healthcare expenditures estimated to increase RMB160 billion (approx. US$24 billion) per year going forward.
In light of those opportunities, combined with having 80 percent of the company’s products included in the national essential drugs list, CSPC Pharmaceutical adjusted its operational strategies to increase the
|
|
proportion of preparation businesses, in a move to complete the transformation from an APIs manufacturer to a producer of innovative drugs, patented medicines and brand-name drugs.
CSPC Pharmaceutical plans to emphasize scientific and technological innovations. Last year, the company was awarded several government-sponsored drug innovation projects, whereby it set up an innovative drug incubation base, three innovative drug research and development platforms and six new drug development facilities.
Cai added, the company is also moving into the field of bio-pharmaceutical, and expects to create a breakthrough in patented innovations of geriatric, anti-cancer and diabetes drugs.
Want to read more?
Positive outlook for China’s pharmaceutical excipient sector
Zhejiang Hisun Pharmaceutical receives green light for production of Tamiflu intermediate
Yabao Pharmaceutical expected to maintain sound development momentum |
|
|
