March 14, 2016, Beijing, China National Biotech Group Co., Ltd. (Sinopharm CNBG) signed an cooperation and restruction agreement with Wuhan Chopper Biology Co., Ltd. (Wuhan Chopper). The headquarters of Sinoparm’s animal vaccine segment will be settled down in BioLack, Wuhan.
Sinopharm CNBG is the largest bio-pharm company in China with human vaccines and blood products as its corn business, which are also its traditional preponderant domain. Its R&D and manufacture bases around China produce all kinds of EPI vaccines in China. The annual production capacity is nearly 700 million doses, accounting for 85% of the domestic market share. Its capacity of blood products also tops in China. More than 1,000 tons of plasma are used as materials for producing 8 kinds of blood products.
To answer the question why CNBG enters animal vaccines business, Yang Xiaoming, chairman of the board of directors of Sinopharm CNBG, said, it was a key strategic step for CNBG to get into that field during the “13th five-year plan” period, as well as an important move to implement the strategic thinking of building bio-pharm and comprehensive healthcare cluster. With the core business of bio-pharm, Sinopharm CNBG was breaking the traditional framework, expanding to other biological-related territories. With all-out effort, it would develop human vaccines, blood products, beauty and health related products, medical diagnostics, animal vaccines and antibody and genetic engineering technology, to form a development pattern with the six major business segments and several competitive industrial clusters.
It is reported that the compound annual growth rate of global animal healthcare business was 6.2% during 2007 - 2014. In China, that figure reached 12.3%, significantly higher than the global average. According to a statistic from China Veterinary Drug Association, during 2011-2015, the growth rate of sales of veterinary bio-products in China maintained at 16.04%. The animal market size is expected to keep at a high growth rate in the following five years.
During next five years, Sinopharm CNBG will continuously extend its animal vaccine business to enrich the portfolio through merging and acquisition. After the restruction, a high-standard R&D center for animal vaccine engineering technology will be built up in Wuhan. In order to make Wuhan Chopper to rapidly grow into a leading comprehensive animal health solutions provider, Sinopharm CNBG will energetically support Wuhan Chopper with financing via capital market and integrating its R&D resources to fuel key products to launch. The goal for this business segment is to realize RMB 1 bio of annual sales and become one of top 3 in the industry.
Why Wuhan Chopper?
Wuhan Chopper Biology Co., Ltd. focuses on biologicals’ R&D, manufacture and sale and has a say in the animal vaccine business, particularly in the pig disease related segment. Its main products are pig vaccines and poultry vaccines. As of now, it can produce three level and multiple series of products, which are national compulsorily use vaccines, high-end vaccines and conventional vaccines. The production capacity reaches 3 billion doses every year.
On the basis of a statistic conducted by China Institute of Veterinary Drug Control, Wuhan Chopper’s PRRS vaccine, swine fever vaccine and swine parvovirus vaccine take more market share in China than its competitors. In the meantime, the company is also planning to transform from an vaccine manufacturer and vendor to a direct professional service provider to farms in the animal husbandry industry.
Yang Huichuan, assistant to president, Sinopharm CNBG, said, Wuhan Chopper and CNBG highly shared the development direction, positioning and the overall goals. The management of Wuhan Chopper had rich experience in animal vaccine technical R&D, marketing channel, productivity construction as well as development planning.
He also addressed, “The entire animal vaccine industry will get benefit from the restruction. After merging, the resources of both side will be integrated to create conditions for Wuhan Chopper’s development in the respect of capital investment and mechanism optimization, etc..While the new plant put into operation, Wuhan Chopper will play a better role in the market effectively during the rising period of the industrial life cycle. Thus, it will integrate and recombine the conditions for IPO to dock with the capital market.
As a expert of biological product , chairman Yang Xiaoming has his own opinion regarding CNBG explores animal vaccine business. He indicated, this time, CNBG entered a new business territory by restructuring and capital operation. CNBG will be more flexible in taking internal growth or external expansion or a mixture of both as the approach to develop other business segments in the future. [Reported by Sinopharm CNBG]