| By Daisy Wang, Pharmaceutical Manufacturing News |
| Monday, 26 January 2009 |
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During 2008, China’s pharmaceutical sector continued high growth in sales and profits, with Chinese herbal pieces prepared for decoction, chemical preparations and chemical active pharmaceutical ingredients (APIs) segments seeing higher-than-industry-average increases in profits.
Combined sales for the period increased 25.8 percent year on year, mainly driven by rises in sales of chemical preparations and biopharmaceuticals. |
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The average gross margin for the industry stood at 30.7 percent, 0.4 percentage points lower than a year ago, while gross profits posted an annual increase of 29.1 percent, a rate 21.9 percentage points lower than a year ago.
For the period, chemical preparations posted an increase of 25.4 percent and 36.6 percent in sales and profits before tax, respectively.
However, when comparing the first 11 months of 2008 with the first eight months, chemical APIs recorded a decrease of 6.1 and 27.1 percentage points in growth of sales and profits, respectively, due to reductions in orders, prices and demand from foreign countries as a result of the financial turmoil worldwide. These factors are expected to continue to bring the growth rate of the APIs segment down in 2009.
Looking into 2009, the pharmaceutical sector in China is expected to maintain high growth as a whole, thanks to policies put in place by the government to extend the coverage of country’s medical insurance scheme. |
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and increased investments by the government in the manufacturing of vaccines, drugs and medical equipment.
Pharmaceutical products made in China were for the most part exported to Europe, North America and other Asian countries in 2008, with exports to the three regions collectively accounting for 88 per cent of China’s total. The country’s foreign trade with other Asian countries reached US$16.2 billion for the first eleven months of 2008, a year over year growth of 17.1 per cent. Exports stood at US$11.3 billion, up 25 per cent from a year prior, with Japan, India and South Korea being the three major export destinations.
China’s foreign trade with Europe amounted to US$15.5 billion, a year over year growth of 34.3 per cent. Exports reached US$8.4 billion, accounting for 28.8 per cent of China’s total. Germany was the country’s largest export market in Europe, with exports totaling US$1.9 billion, followed by the Netherlands and Italy.
Foreign trade with North America totaled US$8.9 billion, a year over year growth of 30 per cent. Exports added up to US$6 billion, up 34.7 per cent from a year prior. The U.S. remained China’s largest export destination in North America. In addition, approximately 19 per cent of China's healthcare products were exported to the U.S.
China’s domestic drug makers remained leading exporters of active pharmaceutical ingredients during the first eleven months of 2008. |
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The leading exporters included Zhejiang Medicine, Zhejiang NHU, Northeast General Pharmaceutical Factory, as well as Hebei Welcome Pharmaceutical and Zhejiang Medicines and Health Products Import and Export. In addition, domestic pharmaceutical producers have played an increasingly important role in China’s exports of preparations for western medicines, though Pfizer Pharmaceuticals remained the largest exporter of the preparations. Six pharmaceutical companies were ranked among the list of top 10 exporters of preparations for western medicines.
China's trade surplus in term of pharmaceutical products soared during the first eleven months of last year. The increases in trade surplus are mainly attributable to the upgrade of the country’s pharmaceutical sector. The proportion of high value-added items to exported pharmaceutical products has been growing year by year.
However, the deepening of the financial turmoil has had effect on China’s APIs exports, with a number of Chinese pharmaceutical exporters experiencing a decline in export orders.
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