Jilin Xiuzheng Pharmaceutical Group Ltd., a leading TCM company in China which is well-known for its GI branded drug ‘Sidashu’, is holding second round of talks with Japan’s Miyakoshi Corporation for a 50% : 50% pharmaceutical distribution joint venture.

Miyakoshi Corporation is a company with diversified businesses and investments including investments in the pharmaceutical wholesaling and distribution business. 

The businesses of the new joint venture company is likely to cover wholesaling, retailing and distribution of Jilin Xiuzheng’s existing drug products, Japanese, EU and North American drug products currently distributed by Miyakoshi, and drug products of other Chinese pharmaceutical companies.  The new joint venture company will seek IPO at the Tokyo Stock Exchange at some point.

Local analysts say that Jilin Xiuzheng Pharmaceutical Group has been pushing hard to internationalize its business in recent years through the formation of joint ventures.  In March 2007, the company reached an agreement with a Taiwanese company to establish a joint venture for Ginseng products.  The new company had a total investment of CNY 80 million and a registered capital of CNY 50 million.  Jilin Xiuzheng said that it would like to expand its Ginseng business to the international market capitalizing on the marketing network and experience of the Taiwanese company. 

Jilin XiuZheng Pharmaceutical Group is the largest private pharmaceutical company in Jilin province with annual sales of CNY 4.2 billion in 2006.  The company has been planning an IPO in Hong Kong or mainland China since 2004, but so far failed to take it off the ground.  The company may have given up the idea of an IPO and instead is likely to seek public listing through acquisition of a shell company in China, according to recent local press reports.