Shandong Xinhua Pharmaceutical Group, China's leading producer of APIs drugs in the categories of anti-infectives, cardio- and cerebro-vasculars and CNS drugs, successfully regrouped following top personnel changes in 2006.

The core business of the group was refocused from almost exclusively on APIs in the past to both APIs and formulation businesses now. As a result of this strategy, the group's business flourished in the past year.

Xinhua Pharmaceutical Ltd. (Xinhua Phama), the group's core subsidiary, announced earlier that its operating and net profits were up 57.84% and 53.48% respectively in the first half. 

The core strategy of Xinhua Pharma for its domestic formulation business is centered on the rural and suburban markets (third end market) of its power base - "Greater Shandong" region which includes Shandong province and its surrounding counties of Hebei and Henan provinces. The company believes its strength in the formulation business lies in the 200 plus generic product approvals it owns, which are all generic drugs well suited for the "third end market. To ensure implementation of its strategy, Xinhua Pharma set up 30 sales offices in greater Shandong region down to the county level.

The strategy seems to be working. Xinhua Pharma's revenues from formulation products rose 25.66% in the first half.  In addition, its total sales rose again by 60% in July and August, a conventional low period for APIs, according to Ren Fulong, General Manager of the company.

The company is also working hard on its export business - so far it has nine products passing COS inspections and six products passing USFDA inspections. While all of these products are APIs, Xinhua Pharma, as many other Chinese firms, is seeking ways to expand its formulation export sales.

The objective for its international business is to make APIs and formulation drug products each account for 50% of the company's future export sales, according to Ren.  

He revealed that a number of multinationals are currently talking to Xinhua Pharma about OEM of drug formulation products.

 

Besides business strategies, Ren emphasized his company's strength in quality control and GMP implementation.