Kaibao Pharma to sell off its Sichuan TCM material unit
Shanghai. January 12. INTERFAX-CHINA - Shanghai Kaibao Pharmaceutical Co. Ltd. will sell its loss-making traditional Chinese medicine (TCM) material subsidiary, Sichuan Kaibao Animal Botanic Medicine Technology Co. Ltd., to Sichuan Doujiangyan Tianheng Trading Co. Ltd. for RMB 5.90 million ($891,443), Kaibao Pharma announced Jan. 12.
The company said the sell-off will relieve operational pressure and help it focus on developing its core businesses.
The Sichuan Province-based subsidiary conducts research of bear-gall powder, an ingredient used in Kaibao Pharma's flagship product, heat-relieving Tan Re Qing injection.
According to the announcement, the subsidiary suffered losses during the Sichuan earthquake of 2008, and has remained in the red since. The ownership transfer will give it access to better funding and human resources.
"The subsidiary only produces bear-gall powder for use in its research and development (RD) program. We have signed long-term agreements with larger providers to ensure supplies of the raw material," a financial representative with Kaibao Pharma surnamed Ren told Interfax on Jan. 12. Its suppliers include Heilongjiang Heibao Pharmaceutical Co. Ltd. and Sichuan Luye Biopharmaceutical Co. Ltd.
Kaibao Pharma achieved sales of RMB 407.89 million ($61.70 million) in the first three quarters of 2010, up 20.12 percent year-on-year.
- KZ