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Health care industry

China's Traditional Medicine Industry Sees Major Investment

Strategic Insights

— 2 min read

China's traditional medicine industry is set to gain significant investment and penetration into the international market with a new joint venture between Hong Kong's Hutchison Whampoa (China) Ltd and Guangzhou Baiyunshan Pharmaceutical Co Ltd. The 50-50 joint venture, valued at 172.5 million yuan (US$20.86 million), will focus on research and development, production, and marketing of traditional Chinese medicines (TCM).

The new firm, named Baiyunshan Hutchison TCM Co Ltd, will leverage Hutchison's strong overseas sales network and expertise in foreign medical consumption habits to penetrate the international market. Baiyunshan will also benefit from Hutchison's distribution channels in over 5,000 drug chain stores worldwide. In the domestic market, the partnership will utilize Watson's Your Personal Store, Asia's leading health & beauty chain, to facilitate the sales of Baiyunshan's TCM products.

Hutchison's strategic plan, which has invested over HK$1 billion (US$128.6 million) in the past five years, aims to strengthen its TCM business in South China. This partnership follows another significant pharmaceutical investment venture between Hutchison Whampoa and China's well-known TCM maker Tongrentang last December, valued at US$239 million.

Key Takeaways:

  • Hutchison Whampoa (China) Ltd and Guangzhou Baiyunshan Pharmaceutical Co Ltd have formed a 50-50 joint venture, valued at 172.5 million yuan (US$20.86 million), to focus on TCM research, development, production, and marketing.
  • The joint venture, named Baiyunshan Hutchison TCM Co Ltd, will leverage Hutchison's overseas sales network and expertise in foreign medical consumption habits to penetrate the international market.
  • Hutchison has established TCM retailing channels in over 5,000 drug chain stores worldwide, providing a strong distribution network for Baiyunshan's products.
  • Watson's Your Personal Store, Asia's leading health & beauty chain, will facilitate the sales of Baiyunshan's TCM products in the domestic market.
  • Hutchison's investment in TCM has seen over HK$1 billion (US$128.6 million) invested in the past five years.
  • The partnership follows another significant pharmaceutical investment venture between Hutchison Whampoa and China's well-known TCM maker Tongrentang last December, valued at US$239 million.
  • Guangzhou Pharmaceutical Holdings Limited has an arm, Guangzhou Wanglaoji Pharmaceutical Company Limited, which has formed a joint venture with HongKong Tongxing Pharmaceutical Co Ltd to develop and market TCM products, health food, and beverage products.

Statistics:

  • The joint venture between Hutchison Whampoa (China) Ltd and Guangzhou Baiyunshan Pharmaceutical Co Ltd is valued at 172.5 million yuan (US$20.86 million).
  • Hutchison has established TCM retailing channels in over 5,000 drug chain stores worldwide.
  • Hutchison has invested over HK$1 billion (US$128.6 million) in the past five years to strengthen its TCM business in South China.
  • The partnership between Hutchison Whampoa and China's well-known TCM maker Tongrentang was valued at US$239 million.
  • The joint venture between Guangzhou Wanglaoji Pharmaceutical Company Limited and HongKong Tongxing Pharmaceutical Co Ltd has seen the stake of Wanglaoji's former controlling shareholder drop to 48.0465 per cent from 94.25 per cent.

Sources:

  • China Daily
  • XIC 02-12 1504

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