Quality Systems Dominate at Interphex Dalian

July 2, 2008

Reed Sinopharma recently hosted the 60th Annual API China event which paired with INTERPHEX China this May in the World Expo Square of coastal city, Dalian, China. The three-day conference hosted some 35,000 visitors and 400 exhibitors. Its theme: “Scientific Innovations and Green Environment Protection.”

The show proved to be multi-faceted in nature, with state representatives and regulatory agencies meeting both behind the scenes and within conference forums to discuss the market outlook. China currently holds 22% world market share with annual growth rates exceeding 15%, $70 billion annual sales and export turnover of $600 million making the country the second largest market for active pharmaceutical ingredients.

The country offers a growing biotech sector, increased manufacturing capabilities and a growing skilled labor force, and Chinese manufacturers are working to exceed the industry standard. Shinva Medical Instruments in Shandong, for example, is a market leader in China for sterilization and packaging equipment and works very closely with Italy and Germany, but company leadership wants to expand further globally.

As the largest research and production base of sterilization equipment in China, Shinva says it is constantly improving its quality management system to keep abreast with international standards.

The company recently partnered with GE in a technology share program, but they and their 11 Chinese subsidiaries want more business in the U.S.market. Liu Jie, Vice General Manager of Shinva, adds “We export our products to Korea, Russia, and the U.S. We see a trend in specialized products for our international clients...everyone is different, and needs individualized attention.”

Tilani Process Technology Co. in Beijing is also looking to get its foot into America’s door by ensuring that its products meet ISO quality guidelines as well as FDA regulations. The company manufactures filters, cryogenic units and dryers developed from the German Nutsche technology.

“We, like a lot of Chinese pharmaceutical equipment manufacturers, are looking to penetrate the U.S. market, but it is hard. What we are doing is trying to be FDA compliant and meet all American standards so our low cost products are more appealing,” said Tilani Director, Jack Wang.

Pall Filter (Beijing), a division of Pall Life Sciences, recently unveiled a new filtration validation center in Beijing to support the emerging biopharmaceutical industry which is one of the fastest growing sectors of the economy in China.

Kevin Liu, Vice President of Pall Filter (Beijing) says that “Currently only 5% of Pall’s $2.5 billion global business is in China, and we must look for new quality control products, invest in more R&D and continue to build manufacturing and validation labs to further expand our presence here in China.”

According to the API China Market Analysis Report, China’s market for pharmaceuticals is on track to reach $25 billion, almost double the current total, in four years. China has also placed a special emphasis on improving biotech and innovative drug discovery and the Chinese government is encouraging increased R&D through tax incentives.

China Shijiazhuang Pharmaceutical Company (CSPC) which is the second largest antibiotic and vitamin manufacturer and distributor in China, exporting $3 billion annually, is aware of the government’s concern regarding China’s lack of R&D facilities.

“Only about 2% of our business is R&D currently. We know this is a problem but few Chinese pharmaceutical companies pay attention to R&D and its importance in maintaining your place in the market,” said GM Tessa Tian.

However, Tian says that perceptions of quality control are the biggest hurdle facing Chinese manufacturers today. “It will take a long time for the U.S. to accept China. The traditional idea that ‘if it is cheap, it can’t be quality’ is the roadblock. We are not yet meeting all international standards because we would have to build new plants to meet FDA standards. We hope that the government will help Chinese companies meet more international regulations,” she said.

American companies with Chinese divisions such as Sealed Air Packaging (Shanghai) have been expanding their Asian facilities over the past 10 years and quality is driving production.

“Our products are compatible with both international and local systems and we have international licenses on all of our equipment,” said Sealed Air Packaging (Shanghai) Director Kevin Lee.

American-based companies such as Particle Measuring Systems and Honeywell also staked their claim on the INTERPHEX China floor. Particle Measuring Systems (Boulder, Colo.) displayed its Lasair III laserbased particle counter, and made the long trip in order to help strengthen its presence in Asia.

Members of the international trade press met with Interphex China hosts at the opening ceremony
of the three-day show. Digital managing editor, Michele Vaccarello, is fifth from left.

According to Account Manager, David J. Geidenhoff, Asia currently represents 35% of their business, and the market has much potential for growth. “We are in the process of having a more direct presence in China later in the year. We will have distributors in China, Korea, Japan and Singapore. We need to get our products out to this growing market…it’s not getting any smaller,” Geidenhoff said.

While both domestic and international suppliers and innovators met on the show floor, regulatory agencies discussed problems affecting market supply and demand within the industry. International experts and scholars joined the discussion to offer insight into the standardization of the industry, sustained development and the globalization of drug policy.

“We must work together on information and technology exchange to transform China’s place in the market from just raw material and API supplier, to an acknowledged leader and center for discovery,” said Li Shunnian, Executive Chairman of the China Pharmaceutical Industry Association.

About the Author

Michele Vaccarello | Digital Managing Editor