Chinese officials gave the go-ahead to Sanofi-Aventis' ($SNY) joint venture with Hangzhou Minsheng Pharmaceutical Group, blessing the French drugmaker's bid to pump up consumer-healthcare sales there by several hundred million within five years. Sanofi's Thomas Kelly, general manager of the company's China unit, says he's aiming to build OTC sales to 35 percent of Sanofi's Chinese revenues.
Although the Sanofi J.V. is initially aiming for $151 million in sales for next year, the Chinese OTC market ranks as the world's second-largest, with more than $16 billion in annual revenues.
The Minsheng joint venture will make vitamin and mineral supplements, as well as 21 Vita, Minsheng's lead product with 70 percent of its sales revenue. Sanofi will hold a 60 percent stake. "The joint venture with Minsheng Pharmaceutical is the start of our efforts in the consumer healthcare sector, and we'll continue to look for partners and potential acquisition opportunities," Kelly tells Shanghai Daily.
Indeed, Sanofi has already added another chunk to its over-the-counter efforts in China, with last week's agreement to buy BMP Sunstone ($BJCP) for $520.6 million, a move that local executives say will beef up the companies' presence in smaller metro areas. "If the acquisition of BMP Sunstone wins the regulatory approval, our outlets in China, particularly in second and third-tier cities, will be much stronger," Paul Leung, general manager of Hangzhou Sanofi Minsheng Consumer Healthcare, tells People's Daily.