Bayer boosted the reach of its international consumer health business when it picked up Chinese herbal and OTC specialist Dihon in 2014. Now it has boosted its production capacity with a new plant that will manufacture both Western OTC products and traditional Chinese medicines (TCM).
The German drugmaker last week opened the first phase of the 1.4 billion yuan ($213 million) plant in Majinpu in the Yunan province of China. At 111,534 square meters (1,200,542 square feet), it is Bayer's second largest over-the-counter products manufacturing site in the Asia-Pacific, the company said in a statement. Dihon started the plant in 2013 and Bayer took it over after its buyout of the Chinese company in 2014 in a deal that brokerage M.M. Warburg estimated at about €500 million ($680 million).
The first phase of construction has secured GMP approval for part of the TCM production line, Bayer said. But additional work is ongoing that will allow the company to start manufacturing Bayer's key TCM product, Dan E Fu Kang, which is marketed as a gynecological medicine for women's health indications including dysmenorrhea, a Bayer spokesperson said Wednesday.
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| Lance Yuen, Consumer Care Head, Bayer China and Hong Kong |
Lance Yuen, head of Bayer's Greater China consumer health operations said in the announcement that the site "will boost our manufacturing capacity of TCM products by three times in 2016, and bring about up to triple the manufacturing and supplying capacity for all Dihon products by 2020." When completed in 2020, the site will be a global hub for Bayer's production of traditional Chinese and Western medicines.
Dihon has several other manufacturing sites throughout China. According to the company's website, Dihon's main facility had been a facility in Kunming National High-Tech Industrial Development Zone, with a 15,000-square-meter (161,000-square-foot) GMP preparation area.
Bayer, which has been selling in China since the 1930s, already has a significant footprint there. In 2014 it said it would invest €100 million to expand packaging and logistics at its plant in Beijing, making Beijing the largest pharmaceuticals packaging site in Bayer HealthCare's global production network.
But Bayer saw the Chinese market for consumer products as a good opportunity. At the time of its buyout of Dihon, it said the Chinese drugmaker was generating revenues of about €123 million ($168 million). Of course that all came ahead of China's current fiscal difficulties. Last week, the yuan fell to a 5-year low against the dollar amid rampant capital outflows, Bloomberg reports. China's stock market also has fallen significantly, sending shock waves throughout international markets.
- here's the release
- read the Bloomberg story