Hualan Biological Engineering Ltd. recently won a bid to acquire Chongqing Yituo Biopharmaceutical Ltd. for CNY 43.6 million.  Hualan is already a market leader for blood products with 40% Chinese market share of globulin, nearly 30% share of blood coagulation factor market, and 10% share of human albumin market.

Local analysts suggest that Hualan has the ambition to become the largest blood product manufacturer in China, and it has been expanding rapidly through acquisitions.  Prior to the Chongqing Yituo acquisition, the company already acquired 12 blood plasma stations in the past few years. 

Blood plasma supply in China has been short since 2004, resulting in higher prices and consequently rising operational costs for blood product manufacturers.  Only 25 of the 34 Chinese blood product manufacturers are believed to be operating normally now with sufficient blood plasma source. 

SFDA recently put into effect a new requirement of 90 day quarantine period prior to the use of any blood plasma for production of blood products.  In addition, the Ministry of Health is likely to require GMP certification for all blood stations in the near future.  It is believed that the Chinese blood plasma supply will reduce by 30% in the near future when both rules are enforced.

Local industry observers believe that small and medium-sized blood product manufacturers will face severe business challenges and consequently become easy targets for acquisition in 2007 and 2008.