China Pharmaceutical Group expects VC sales to increase 7.4% this year

With overseas market demand gradually recovering, vitamin C manufacturer China Pharmaceutical Group (1093) expects that the company's vitamin C sales will increase by 7.4% year-on-year to 2.9 million tons this year, but due to the new production capacity in the market, investment will be dragged down. The interest rate dropped by 11%. At the same time, the company has actively launched its proprietary pharmaceutical business in recent years and expects to enter the harvest period in the next two years.

In an exclusive interview with Reuters, China Pharmaceutical Executive Director Jian-Wen Wen said that due to the financial crisis, sales of vitamin C decreased by 10% year-on-year, and exports accounting for about 80% of sales fell 17%. He estimates that the gross profit margin of vitamin C may fall back to about 50% this year.

Yu Jianwen also pointed out that the company is actively cultivating its proprietary pharmaceuticals business, and has become a growth point for the future, in order to cooperate with the Chinese government in investing heavily in medical reform and expanding the scope of medical insurance coverage. He estimated that the gross profit margin for this year's business could increase by 2 to 3 percentage points year-on-year, and it is expected that the proportion of the finished medicine business will account for 70% of the turnover in 3 to 5 years. The company has more than 50 kinds of medicines on the list of national essential medicines. It is hoped that the 2011 to 2012 year will be the harvest period of the finished medicine business.

Yu Jianwen also disclosed that since the largest investment in pharmaceuticals is research and development costs, mergers and acquisitions will be a quick way to accelerate the development of the proprietary pharmaceuticals business, or they may consider purchasing small-scale pharmaceutical companies to develop new product varieties. The current operating conditions of the company can be used for acquisitions of 200 million to 300 million yuan.