Japanese, Danish Companies Boost China Operations

Japanese company Meiji Seika Kaisha is to boost its operations in China, opening a new JPY3bn (US$29mn) joint venture antibiotic products factory in April. The company, which mainly makes confectionery in Japan, is targeting a tenfold increase in its local pharmaceuticals sales to JPY10bn (US$96.84mn) by 2009. The plant will produce ingredients for prescription drugs and animal antibiotics.

Meanwhile, leading Netherlands-based vitamin producer DSM NV has also announced that it is to acquire a locally held stake in Swiss drug major Roche's Shanghai vitamins joint venture. DSM acquired Roche's nutritional products business in 2003, and expects to pay roughly US$13mn for the minority stake.

DSM's purchase comes amid reports that the company is in talks to acquire a stake in China's largest drug company, North China Pharmaceutical (NCPC). The deal is representative of the greater foreign participation in the wake of the partial liberalisation of China's drug market, as well as local companies' somewhat basic product lines. As the sector consolidates, many Chinese drug producers may be unable to survive unless greater foreign involvement leads to greater product sophistication. Notably, multinational drug producers, such as Switzerland's Novartis, have recently called on China to fully enforce anticounterfeiting laws, a process that the company's CEO warns could take several years.