Holley Pharm to sell off pharma business
Shanghai. September 1. INTERFAX-CHINA - Chongqing Holley Pharm Co. Ltd. will gradually sell off its pharmaceutical assets in order to return to its electricity meter business, the company announced Aug. 31.
According to the announcement, Holley Pharm will transfer its 99.52 percent stake in Beijing Holley Ketai Pharmaceutical Co. Ltd. to sister company Huafang Pharmatech Co. Ltd., also owned by Holley Group Co. Ltd., for RMB 146.03 million ($21.44 million).
Holley Ketai is mainly engaged in the production and marketing of Holley Pharm's flagship product, artemisinin, and has now ceased seeking investment targets in the sector.
Holley Pharm entered the pharmaceutical sector in 2000 following the stagnation of its electricity meter business. Since then, it has forged an industrial chain for the plantation, extraction and production of artemisinin products. Artemisinin prices started to rise in 2004, and its artemisinin business brought in huge profits in 2005 and 2006.
However, Holley Pharm's artemisinin business started shrinking as artemisinin prices started to decline from the second half of 2006. In 2009, the company's total sales revenue was down 31.68 percent from 2008, and it suffered losses of RMB 82.89 million ($12.17 million).
Meanwhile, China's central government started upgrading the country's electric grids in 2008, creating demand for electricity meters and other instruments for electricity measurement. In 2009, Holley Pharm's electricity meters business generated revenue of RMB 1.01 billion ($148.31 million), accounting for more than half of its total sales revenue of RMB 1.96 billion ($287.81 million).
In December 2009, the company sold its stakes in Guangdong Meikang Wante Pharmaceutical Co. Ltd., thus withdrawing from the pharmaceutical distribution sector.
Holley Pharm signed a letter of intent to hand over its pharmaceutical assets to Huafang Pharmatech in March this year.