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API and Interphex China aims at going beyond China

GAYLE DE MARIA
chimica oggi/Chemistry Today
gayle@teknoscienze.com

The 67th edition of API China and INTERPHEX China, China’s leading exhibition for the pharmaceutical manufacturing sector covering the complete spectrum of products from raw material, fine chemicals, intermediates, ingredients, processing and packaging machinery, was held in Nanjing from 9-11 November 2011 and offered a comprehensive business platform to domestic and international visitors. During the three days show 1,400 exhibitors –in a 55,000 square meters area- and more than 30,000 visitors from 50 different countries and regions attended the event. Reed Exhibitions, the world’s renowned event organizer, and Sinopharm, China’s most established pharmaceutical exhibition organizer, were responsible for the organization of the entire event. This edition saw the continuation of the Sino-India Partnership Program (SIPP) that was started at the spring 2009 exhibition. The three-day exhibition started with an opening ceremony which involved chiefs of the Chinese and Indian associations, of the Chinese and Indian industry and of the organization. The floor plan of the exhibition was organized in 4 halls: A and B completely devoted to Pharmaceutical ingredients (62%); C to pharmaceutical machinery (15%) and pharma ingredients; D to packaging (23%). Together with my interpreter (given by Reed Sinopharm Exhibitions) and Chimica Oggi /Chemistry today’s Chinese representative I started my Chinese experience through the exhibition. I had the chance to have a word with some of the most important APIs Chinese manufacturers and gain information on their activity and on the exhibition.

Harbin Pharmaceutical group CO., LTD
Philip Kwok- Imp. & Exp Division – Deputy General Manager

Harbin Pharmaceutical Group Co., Ltd. is China's second-biggest drug maker by market value. Harbin Pharmaceutical is engaged in the research, development, manufacture and sale of pharmaceutical products (finished products) (APIs are in fact a small part of the business). The Company primarily offers antibiotics (i.e. Penicillin), Chinese patent medicines, over-the-counter (OTC) medicines, healthcare products and synthesized preparations, among others. During the year ended December 31, 2007, the Company obtained approximately 73% and 14% of its total revenue from the sale of western medicines and traditional Chinese medicines, respectively. Its aim in two years’ time is to increase the finished products manufacturing.
When I asked Philip Kwok what he thought about the exhibition he was literally enthusiastic. “The exhibition has become more important because now people are coming from abroad. It is no more focused on the domestic market”. Talking about the company’s most important geographical markets, Mr Kwok told us :“Our API main markets are focused in Russia, Turkey, South Asia, India. The US market instead is very difficult to approach”. They have big business in Italy: 20 years ago they imported from Italy, now they only export to this country.

North China Pharmaceutical CO.,LTD
Simon Peng- Vitamin C Series – Product manager

North China Pharmaceutical Group Corp. (NCPC), is a leading pharmaceutical manufacturer in China. It is one of the world leading antibiotic producers both in technology and production scale. NCPC has been continually growing and taking the lead in China pharmaceutical industry in key economic indexes, ranking one of the Top 500 Enterprises and the best profit-makers in China. NCPC currently produces over 430 kinds of antibiotics, semi-synthetic antibiotics, pharmaceutical intermediates, vitamins, biotechnology products, veterinary and nutraceuticals both in bulk and in finished products. NCPC established a rigorous and efficient quality control and quality assurance system. All of the processes in the production comply with the current GMP. The major production lines have passed the national GMP audit.
“Our main focus is the European area and North America. 30% of our exports are instead in Asia and South America”. “This exhibition is a good platform for both manufacturers and customers: customers are different from the Europeans: most of the visitors are from China and Asia”.

Northeast Pharmaceutical Group CO., LTD
International Trade division
Sun Huigang – Deputy General manager – Deputy General Economist

Northeast Pharmaceutical Group Co., Ltd. (NEPG) has over 60 years of history on products based on chemical synthesis and bio-fermentation. The key business of NEPG is divided into three segments: active pharmaceutical ingredients (APIs), finished pharmaceutical formulations and supply chain services. NEPG is listed and traded on Shenzhen Exchange Stock market in China since 1995. There are 8600 employees working in the company. Annual turnover reached to 1.5 billion US dollars in 2010. NEPG is proud of being the first Vitamin C producer in China, as well as the inventor of the two step fermentation technology of Vitamin C production. At present, NEPG is producing 12 major series of APIs and around 200 kinds of finished formulation products, mainly focusing on therapeutic segments of Anti-infective, Gastrointestinal, Cardiology, Gynecology, anti-Virus etc. All the production plants in NEPG are GMP approval, well equipped with state-of-the-art manufacturing and packaging machines. The production site for the finished formulation products is located in the Development Zone of Shenyang, which occupies an area of 180,000 square meters, designed with underground corridor for all logistics, as well as an independent workshop for production of nutrition products and dietary supplements. Products of NEPG are exported to over 80 countries and regions all over the world. In the recent years, NEPG is devoting more in the improvement of quality system. Meanwhile, NEPG is also increasing the investment in the Research and Development work of generic drugs and nutritional products.
Talking about the difference between CPhI www and API China Mr Huigang told us “This exhibition is a good platform to find manufacturers of APIs and it is more important than CPhI because at CPhI there are only trading companies and people instead want to talk directly to the producers”.

Zhejiang Nhu Company LTD
Wang LiFeng – Market department manager

Zhejiang NHU Company Ltd., together with its subsidiaries, primarily engages in the manufacture and sale of chemical active pharmaceutical ingredients and preparations. Its products include vitamin E, vitamin A, vitamin H (which have gained the first position in China both in capacity and exporting amount - NHU has become one of the top three vitamins manufacturer globally), carotenoid, condiments, and essences, which are used as medical intermediates, feedstuff additives, and food additives. The company also provides equipment for petrochemical and other industries. 2/3 of the products are exported to Europe and the US, and the remaining 1/3 is meant for the domestic and Asia market. “We have attended this event for more than 10 years now; but our purpose during the years has changed: before our aim was to set business, now our aim is to communicate with our customers and do advertising”.

PSC Asia
Yen Min Chu - US management representative

PSC Asia is a people-oriented company; putting great value on personal and business relationships. “Our people are our valued asset; providing quality and vitality of our services. As a renowned leader among the pharmaceutical and biotechnology sectors, we continue expand our service offerings to cater to our current and future clientele. Our consulting and engineering staff is made up of experienced professionals with diverse educational disciplines and professional experience. We are committed to providing all of our clients with top-quality industry solutions that are timely and cost-effective for each individual organization”. PSC Asia was established in 2007 as the Asian subsidiary of PSC Biotech Corporation. Headquartered in Singapore, PSC Asia also has regional offices in China and representatives in Philippines, Middle East, and India. PSC Biotech Corporation, headquartered in US, is a global life sciences consultancy that performs projects and staff augmentation in the following disciplines: Engineering, Information Technology, Technical Services, Validation, Compliance, Regulatory Submissions, Clinical, Project Management and Quality Assurance. PSC Biotech was incorporated in 1996 and has been performing projects globally for over 15 years. PSC Biotech has over 358 customers in 23 different countries around the world. “Our mission is to maintain our quality and value of our products and services, enabling steady growth and development of our service area and offerings while specializing in areas of Validation, Quality and Compliance on an international scale”. When asking Chu why they were exhibiting at API China he told me that the exhibition is a good way to display their services to their potential customers who are finished products companies, main visitors of the show.

Tianxin Pharmaceutical CO, LTD
Zan Chang – International Business Department

As a leading manufacturer of vitamins, Tianxin is always dedicated in developing, manufacturing and marketing trustworthy products and providing efficient service. “We aim to succeed together with our global customers and partners. With the persistent efforts made by all staff of Tianxin, our products such as Vitamin B1 (Thiamine Mononitrate and Thiamine Hydrochloride), Vitamin B6 (pyridoxine hydrochloride), Naproxen, Naproxen Sodium, Ascorbyl Palmitate and Mefenamic Acid are dominant in both domestic and international markets. And with the strong support from the Zhejiang HQ, our subsidiary companies in Jiangxi and Shanxi has been running and expanding steadily. Besides, our R&D center in Shanghai is providing effective technical support for our customers as well”. Chang told as that API China brought them business in the past but today is more a networking show to bring friends / customers together.

Angel Yeast Co. LTD
Andy Li –Vice Director of R&D centre, Director of Biotechnology department

Angel Yeast Co., Ltd, founded in 1986, is a listed high-tech yeast company in China, which is specialized in the production of yeast and yeast derivatives.  As one of the largest yeast and yeast extract manufacturers in the world, up to now, Angel has set up 10 factories in China and Egypt. Angel's main products include baker's yeast, brewing yeast, yeast extract, nutritional yeast for human and for animal, etc. Angel provides products and services for bakery and pastry, wine and alcohol, food seasonings, medicine, nutrition and health care, animal nutrition and other industries for more than 140 countries and regions globally. Angel's production lines, with the advanced process control system and equipment, have achieved full CIP cleaning to ensure high-quality yeast products and food safety. Angel has ISO22000 quality management system certification, HACCP certification, GMP certification, and Kosher certification; the testing center has been accredited by CNAS, and is the only nationally recognized lab of yeast products in China. Angel has a 'National Key Scientific and Technological Achievements Promotion Program - Yeast Technology Research and Promotion Center', state-level enterprise technical center, post-doctoral research station, and has employed internationally renowned experts. Angel, according to customer needs, has set up research centers with world class equipment of molecular biology, culture collections, the fermentation process, yeast extract, flour fermentation, bio-medicine, nutrition, health care and environmental protection. Angel, with a large number of international and domestic technology partners, has formed development and research mechanism with characteristics of combination of independent research and the introduction and cooperation, and matrix project organizational model. Angel has abilities of quickly identifying the market demand, integrating a number of professional skills, and developing new products. Angel has applied the clean production technology from the very beginning of its production. The high-concentration organic waste water, through evaporation, drying, and granulation, are made into bio-organic fertilizer, which is the ideal organic fertilizer for green food and pollution-free agricultural products. All the factories of Angel have first class environmental protection facilities, and have achieved non- pollution emissions. “We are very satisfied with API China and Interphex China because a lot of manufacturers here are our clients!”.

Sino-India Partnership program (SIPP)
In addition to the exhibition API China and API Interphex included a special program, Sino-India Partnership Program, to further enable business relations between China and India. SIPP included a special zone of Indian API manufacturers at API China (India Buyer Port) as well as a Sino-India conference session, which was supported by the China Pharmaceutical Industry Association (CPIA). “India Buyer Port” is a one-stop platform access for Chinese manufacturers to India market and a way for India API buyers to source for the best supplying options from China. Each port was provided with a bilingual hostess to help communication between Chinese manufacturers and India buyers.
To understand this partnership program I was invited together with other media representatives from India and South Korea to a roundtable. I had the chance to interview N.M.Munjal, President of the Indian Drug Manufacturers’ association (IDMA) and of Pharmexcil, Daara Patel of SIPP and IDMA Secretary-General and Diren Shah, managing director of Eastern Chemicals (Mumbai) Pvt. Ltd.

M.N. Munjal
The Indian Drug Manufacturers’ association (IDMA) ) was formed in 1961 to help Indian manufacturers and to protect the interest of the Indian consumer. IDMA has around 800 members, made up of large, medium and small national manufacturers spread across the country. IDMA works with the Government on the industry’s development plans and various public matters. It has also represented the Industry on such important legislation as the Indian Patents Act, 1970, a landmark piece of legislation that gave a huge impetus to the relatively nascent drug industry. It has been in the forefront actively supporting the Ministry of Health & Family Welfare in compiling and bringing out the Indian Pharmacopoeia. “IDMA has always worked to ensure that our people have a better, healthier longer life. Since its establishment, life expectancy has passed from 41 years to over 65. Our goal is to provide access to quality affordable medicines for all”. “ To do this we decided to strengthen ties with another important pharmaceutical market, the Chinese one, and sign beginning of year 2011 a Memorandum of understanding (MoU) with the China Pharmaceutical Industry Association. The core aim of this understanding is to give tough competition to highly developed markets. If you think that the Indian pharmaceutical market size is 20 billion US$ and the Chinese market is 40 billion US$, if you put them together we can reach 60billion US$. The problem is that China has always had an easy access to the Indian market but India hasn’t got the same easy access to the Chinese market. Therefore this agreement will pave the way for increased cooperation”. Talking about drugs going off-patent between 2011 and 2013, Munjal indicated this as a huge opportunity for the Indian Pharma industry (actually Indian companies are working on drugs which will go off patent on 2020, because they have already worked on the 2011-2013 ones). “Indian pharma industry is well poised to become a US$50 billion industry by 2020”. Munjal raised concerns about an impending Multinational corporation (MNC) monopoly and the impact on the availability of affordable medicines. “If MNCs are allowed to establish their monopoly they are bound to raise drug prices. And if the global Pharma majors are actually also trying to blunt the competitive edge enjoyed by Indian companies in the world market so that their monopoly on international trade remains unchallenged, we need to put a stop to this practice. All overseas takeover proposals relating to the pharma sector should be restricted to a ceiling of 49% and routed through the Foreign Investment Promotion Board (FIPB)”.
IDMA has started also to inspect manufacturing facilities of countries from where Indian companies are sourcing APIs and intermediates. “This will certainly ensure quality of products coming into the country but of course this needs to get into flow”.
The dynamic growth of Indian Pharma Industry, a knowledge based industry, and the recommendations of four major Pharma associations made the Ministry of Commerce & Industry to realize the need for separate export promotion council. Accordingly, Pharmaceuticals Export Promotion Council (PHARMEXCIL) has been set up on 12.5.2004 and Munjal is president also of this council whose role is to start initiatives focused on Pharma export.

Daara Patel
“China has had until now inherent quality and credibility problems. Now, of course, they are getting over it as far as bulk drugs are concerned. They have huge-capacity plants, they make only one or two raw materials per plant, they have government support that we do not have, and they do not compete amongst themselves—they all work together with the government’s direct support. Their line cost is very light, the cost of interest is very low, and they do not have labor problems like we have. Again, they have lots of support from the government—and this is why they manage to be so competitive. And given their capacity, they can manage such low prices that we have no choice but to buy from them. However, in formulations, we still have an edge over them. And it will not be that easy for China to catch up. Furthermore, China is getting oriented towards the European pharmacopeia, whereas traditionally, India is more aligned with U.S. FDA procedures and standards. We are trying to work together, but until now there has been a communication gap between Indian and Chinese Pharma companies. For this reason we are sure that the MoU agreement will help fill in this gap even if major steps will be needed. SIPP, moreover, started in year 2009 to enable China and India to find ways of working closer and better together based on stronger friendship and deeper understanding as well assist the cooperation between CPIA & IDMA. We should therefore try to get the best out of both markets. We are learning from China and China is learning from us. We believe that, in global terms, if China and India do not compete, and take advantage of the synergy benefits that they enjoy (for example, we buy API from them, and they give us formulations to manufacture), we can do wonders and we can take on the U.S. and European countries”.

Diren Shah
Eastern Chemicals (Mumbai) Pvt Ltd is one of the leading names in the Indenting market (indenting pharmaceuticals raw materials i.e. API’s, Intermediates of API’s, fine chemicals and Agrochemicals) in India Market. “Formed in the year 1969, we remain to be one of the oldest indenting houses in India”. Eastern has been engaged in sourcing from various reputed manufacturers all over the globe to market their products in India. “Our product range covers a wide range of bulk drugs-APIS, Pharmaceuticals Intermediates, Agro chemicals-Veterinary, Dyes- Pigment intermediates and Fine Chemicals. Under the leadership and guidance of our founder C. P. Shah (B. Pharm) who has been in the pharmaceuticals business for more than 50 years, we enjoy an excellent credibility among customers and suppliers who know that our Experience, Expertise are always at their disposal”. ”We aim to be the leader in our products and markets by providing high quality and cost effective services to our customers. We pursue excellence in all that we undertake and take steps to improve ourselves continuously. And through the innovative application of our knowledge and our infrastructure, we aim to grow Responsibly”. Talking about products and the market Shah told us “Our product range covers Antibiotics, Ergot Alkaloids, Anti-Tuberculosis, Anti Malarial, Anti-ulcers, Oncology products and Intermediates of various New Drugs. We are supplying anti cancer products manufactured by USFDA approved plant, we have strong support and close relations with several Manufacturers”.
Eastern Chemicals attended for the first time API China in 2005. Shah thinks it is a good event as, compared to CPhI China, there are only manufacturers; whereas at CPhI it is difficult to distinguish between manufactures and traders. Moreover he seemed really enthusiastic about SIPP organization and satisfied with more than 500 visitors in the Indian area during this year’s exhibition. “It is really a good platform for small Chinese manufacturers to approach the Indian buyers”.

Daniel Chan

DANIEL CHAN

Finally we had the chance to spend some time with Daniel Chan, director marketing and International Sales team, Reed Sinopharm Exhibitions. I asked Daniel to talk about the history of the exhibition and its purpose. “The first edition started in 1964, so the exhibition is 47 years old. The exhibition started to basically service the pharmaceutical ingredients manufacturing companies in China only –the domestic market. This exhibition was formed to create a platform for the Chinese buyers to source ingredients from Chinese sellers, in the past. And then starting a few years ago and with the demands of our exhibitors (ingredient manufacturers suppliers) the show changed from a Chinese show (because China is the biggest exporter of APIs worldwide) to a more open show. With the Indian Buyers Port program which started in 2009 we have helped Indian buyers to meet and source the right APIs for their formulations”. Talking about the SIPP, Daniel told us that this program was started because the organization realized that there were challenges that Indian visitors buyers were facing during the exhibition, the most important of all communication. Indian buyers were really interested in the show because they could find directly manufacturers of APIs and no more traders, but of course the language was an issue. Moreover the fact that API China is organized each time not in a big Chinese city but in a minor city posed serious concerns about the place and the safety.”It is like a strange land for our international participants to come to the show, they don’t feel like very safe” underlined Daniel. For all these reasons the organization started looking at the needs of their Indian visitors; their organization went to India and talked with the government representatives to understand how Indian visitors could become more comfortable in visiting API China. This led to the Sino-India partnership program which has the aim to set up a comfortable and familiar environment to Indians and help Indian and Chinese policy makers to meet and start collaborations. The collaboration started with 9 Indian companies exhibiting the first time, improving to 20 the year after and implementing a real culture exchange through increasing advertizing. Now the Chinese companies have understood how important is this collaboration / exchange that they are the first to ask information on the Indian area before the starting of the exhibition.
During our meeting I asked Daniel if according to him there is space for a Chinese / European collaboration as the one established with India. Daniel and his team are certainly looking at having a GBP (Global buyers Port) at API China in the near future. They want to bring value to the show: bring International visitors to Chinese Manufacturers and give the opportunity to international visitors to source the best quality APIs and understand more about China. To do this there is a plan to invite the top pharmaceutical manufacturers from Europe (the top five European countries) which have the most trading volume or buy the most from China. “I think the best way would be to contact the European associations first to find the correct partner for each country to talk to. There could be different buyers lounge specific for each country”. The only problem I could see in this situation (on my personal experience at the show) would be communication issues. Daniel however has guaranteed the presence of several translators Chinese / English to overtake this language barrier. Of course English would be a must in this case and the presence of European exhibitors must be organized in advance to train the translators appropriately (with correct pharma glossary). “The next step would be to encourage European manufacturers to meet Indian manufacturers on line and share experience. Of course everyone will have a busy agenda but we only need to balance it. We as organizer can provide the platform and basically say: it is an open market, this is the world, bring your best to the show, and benefit the best out of it”. “We are here to cultivate a very active and very rewarding platform for the market players to come in and get the best business benefit out of it; we are not here to promote any form of competition. Competition is everywhere, but we think that our platform is neutral. The success of our exhibition is determined by human interactions and the relationship formed during the show. Key is to understand the needs of our exhibitors and visitors (from marketing to practical needs (i.e. food)). We try to cultivate an harmonious environment, to create a more effective platform for competitors in the market to meet in a most neutral way, in a most objective platform, to share and voice out what they think”. ”When you at the end of the day establish a friendship, competition can be seen in a different way” concluded Daniel.

Coming to a conclusion, I would like to express my personal opinion on what I have seen and on my feelings. As it was my first time in China I was really excited and curious about meeting a so different culture and population. Entering the expo center I felt that everyone had something to tell and was anxious of sharing their knowledge and experience. My only way, unfortunately, to communicate with the rest of the world was via my translator as only few people were able to speak English. The language barrier is really something the organization needs to work on: if the aim is to make this exhibition more international the communication needs to be improved: translators are essential. Also exhibitors need to prepare brochures both in Chinese and English in order to give visitors a general overview of the company. As already indicated by Daniel Chan the aim is to make people feel comfortable and to do this an area with European food is highly recommended. Specific conferences to improve the European / Chinese relationship, as the ones organized for the Sino-India partnership, are really welcome. Another important issue is internet availability: free Wi-Fi connection should be a must for international events. An important issue is also culture exchange. I think the organization did a huge and good job to enable culture exchange between China and India through the welcome dinner and specific conferences. And I am sure the same could be organized with European representatives (already in the plans of the organization). Talking about the exhibition per se, I think that in order to attract European exhibitors and visitors the organization should work on the floor plan. It would be useful to have for example FDA, EMA and GMP approved manufacturing companies in a specific area: in this way Europeans can interact directly only with companies that are compliant with European regulations, without wasting their time with Chinese companies that are domestic oriented. These are of course only a few personal hints to improve and help the event become more international. I am sure the organization will study specific solutions with competent European authorities and start fruitful partnerships with European companies seriously interested in the Chinese market.

Nanjing is the capital of Jiangsu province, China, and has a prominent place in Chinese history and culture.
Located in the lower Yangtze River drainage basin and Yangtze River Delta economic zone, Nanjing has
always been one of China's most important cities. It served as the capital of China during several historical
periods and is recognized as one of the Four Great Ancient Capitals of China. Nanjing was the capital of
the Republic of China before the Chinese Civil War in 1949. Nanjing has long been a national center of
education, research, transport networks, and tourism.

Reed Sinopharm Exhibitions Co. Ltd. (Reed Sinopharm) is a joint venture between Sinopharm, which is
the largest state owned pharmaceutical group in China, and Reed Exhibitions, which is the world’s leading
organizer of trade and consumer exhibitions with a portfolio of over 430 events in 32 countries. As a
leading professional organizer of exhibitions, Reed Sinopharm commits itself to the health care industry
for mutual development. It holds exhibitions and fairs which rank among the largest in the health care
sector worldwide.

FIGURE

Picture 1. From the left: Indian media representative, Daara Patel, M.N. Munjal, Italian and South Corea media representative (da mettere nel paragrafo di Munjal)

Picture 1. From the left: Indian media representative, Daara Patel, M.N. Munjal, Italian and South Corea media representative (da mettere nel paragrafo di Munjal)