Even as China fast becoming a mighty economic force on the global stage, its burgeoning pharmaceutical sector presents a unique parallel of competitiveness along with all leading industries. According to the latest IMS report the Chinese pharma market will grow 15-16 per cent to touch $15-16 billion in 2007. In addition, China is now the number one exporter of Active Pharmaceutical Ingredients (APIs) in the world.
The ultimate size and forecast exponential growth in future demand for pharmaceuticals, coupled with the inherent low-cost structure of Chinese manufacturing offer huge opportunities for pharmaceutical enterprises.
China has over 7,000 pharmaceutical finished drug companies and pharmaceutical ingredients manufacturers and about 1,000 pharmaceutical machinery manufacturers in China. Comprised of a large number of medium and large-scale manufacturing companies, China is seen by many pharmaceutical industries as a key component in their cost-reduction strategies. Indeed, many recognize that they must set up their own low-cost Chinese operations or risk being shut out by indigenous keenly-priced competitors. By way of example, as recently as May 2006, Astra Zeneca of Wilmington, Delaware, U.S. announced it would invest $100 million in R&D in China up to 2008. And most recently, the Swiss pharma giant Novartis has unveiled its plans to set up $ 100 million R&D facilities to conduct biopharmaceuticals research in Shanghai.
APIs make up a significant part of China's international medical trade, accounting for over 50% of total medical exports. There are over a thousand API producers in China, most producing for both the domestic and export markets. China exports numerous active pharmaceutical ingredients all over the world, including 70% of the world's penicillin (making it the largest world-wide producer), 50% of its aspirin, and 35% of its paracetamol (acetaminophen) generally at prices between 35 and 65% lower than Western suppliers.
Besides such high levels of API production and sales, China also makes up one of the largest areas for API demand. There is an increasing demand from China for APIs with high added-value which are increasingly sourced from overseas rather than low added-value products that can be sourced in the domestic market.
Chinese bulk drugs are sold all around the world. The EU, US, India and Japan are the biggest trade partners and together make up 60% of China's export markets. China exports bulk drugs such as vitamins, amino acids and sweet taste agent to the US; vitamins and antibiotics to Europe; enzymes and primary amino acids to Japan; and antibiotics and hormone intermediates to India.
The fact that China represents a low cost R&D environment is a major driver in this off-shore trend. China has a plethora of scientific and technical manpower, and the wage rates of their chemists and researchers are in the order of 60-70% lower than the costs of similarly experienced staff in the West.
It has often been said that trade shows provide a window on the health and vibrancy of a market-place. In this context one of the China's most comprehensive pharmaceutical events, API China, achieves tremendous significance. It will run concurrently with Interphex China during 15-17 November 2006 at Qingdao, China. API China, which has so far run for 57 editions, typically attracts over 1,100 exhibitors representing active pharmaceutical ingredients, pharmaceutical processing, packaging equipment and material suppliers. More than 32,000 buyers from the entire pharmaceutical manufacturing chain all across China also attend.
Interphex China is an ideal business opportunity for the world's pharmaceutical packaging technology, materials and processing machinery. There will be over 400 exhibitors encompassing packaging technology, processing machinery, engineering, packaging materials and other related business sectors.
In addition to sourcing opportunities, Interphex China will feature a series of conferences that provide the latest market intelligence and technology development for the industry. More than 500 delegates are expected to attend the intensive one and a half day conference program to learn and discuss the latest trends and development in the pharmaceutical industry.
Based on previous attendance to API China, Interphex China will benefit from the presence of senior level executives from the pharmaceutical manufacturing sector that typically attend API China. For the last show (November 2005 in Hangzhou), 23% of attendees were presidents and CEOs while 50% were senior managers. Specifically, 6,000 out of the 32,000 visitors indicated their objective in visiting API China Hangzhou was to source for and acquire pharmaceutical packaging technology, materials and manufacturing equipment as well as active pharmaceutical ingredients. Moreover, exhibitors from the active pharmaceutical ingredients sector are targeted buyers for the Interphex China exhibitors, according to official figures.
API and Interphex China has been designated one of the leading trade events officially endorsed by the Ministry of Commerce of the People's Republic of China. The shows enjoy strong support from the China Pharmaceutical Industry Association and the China Pharmaceutical Packaging Association. In addition, as the launch will be held in the city of Qingdao, Interphex China and API will be supported by the People's Government of Qingdao Municipality.