Albany, NY -- (SBWIRE) -- 06/04/2014 -- Chemical pharmaceutical consists mainly of chemical drug preparation and active pharmaceutical ingredient (API), and the gross margin of chemical drug preparation industry is generally higher than that of the API over the same period. In 2013, China chemical drug preparation industry and and China API industry recorded revenue of RMB 573.1 billion and RMB 382 billion, with gross margin of 35%-40% and 20%, respectively.

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China is a big producer of chemical APIs, capable of producing about 1,600 varieties of APIs. China ranks first worldwide in output of several bulk APIs including penicillins, vitamins and antipyretic analgesics, and holds a significant share of the featured APIs like statins, prils, sartans in the world. China produced 2.709 million tons of chemical APIs in 2013.

Although China is the world's leading chemical APIs supply region, the concentration of China chemical APIs industry is rather low due to numerous categories of APIs and limited overall strength of domestic enterprises, which occupy an important place only in single or a few categories of pharmaceuticals market. In addition, under the pressure of both environmental protection and industrial upgrading, many large APIs companies in the country are transforming into drug preparation companies through means such as R&D and acquisitions.

North China Pharmaceutical Group Corp. (NCPC) and Northeast Pharmaceutical Group Co., Ltd. are major suppliers of antibiotic and VC APIs in China, with supply of VS reaching around 20,000 tons each. In 2013, the two companies’ total revenue from APIs and their revenue from drug preparation business reached RMB 5.695 billion and RMB 3.871 billion, respectively.

Zhejiang Medicine Co., Ltd. and Zhejiang NHU Co., Ltd. are the leading manufacturers of VE products around the globe, with raw materials (vital ingredients for the production of VE are limited raw materials: isophytol and trimethylhydroquinone) for VE being produced by themselves. However, the two companies’ development is constrained due to a weak global demand for VE, of which Zhejiang Medicine reported revenue of RMB 4.915 billion from pharmaceutical business (APIs+ preparation), down 6.3% year on year.

Zhejiang Hisun Pharmaceutical Co., Ltd. and Zhejiang Huahai Pharmaceuticals Co., Ltd. are the key suppliers of featured APIs in China, of which the former specializes in antineoplastic and cardiovascular products, and the latter, which obtains three certificates from EDQM in 2013, is a major global supplier of prils and sartans APIs. In 2013, the two companies’ total revenues from APIs and drug preparation business were RMB 3.226 billion and RMB 2.272 billion, rising by 19.5% and 14.7% from the previous year, respectively.

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Zhejiang Xianju Pharmaceutical Co., Ltd. and Tianjin Tianyao Pharmaceuticals Co., Ltd. are the leading suppliers of hormone APIs, of which the former has been aggressively expanding into downstream drug preparation business. In the context of stricter environmental standards and rising costs of raw materials, developing the downstream will undoubtedly ensure competitiveness of the company. In 2013, Xianju Pharmaceutical posted total revenue of RMB 2.233 billion from APIs and preparation business, up 16.2% against the prior year. Also in 2013, the company acquired three EDQM certificates for its APIs.

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