Sanofi bets on rapid expansion in China

Pharmaceuticals giant plans new factories, acquisitions as it seeks to grow local presence

PUBLISHED : Tuesday, 02 April, 2013, 12:00am
UPDATED : Tuesday, 02 April, 2013, 4:57am

Sanofi, one of the world's largest drug makers, expects double-digit growth in China over the next five years as it further penetrates county-level markets and expands capacity.

Christopher Viehbacher, the French firm's chief executive, said the growth of sales in China may slow, considering the large base it has established in the country and the uncertain macroeconomic environment. But growth is still expected to remain in the double digits, he said.

Sanofi achieved sales of more than €1 billion (HK$9.95 billion) in China last year, up 15 per cent from the year before.

"The China market will be a priority for us," Viehbacher said at a media briefing in Beijing yesterday. "We will continue to expand geographically, launch new products and look for more acquisition opportunities."

He said Sanofi plans to open four factories on the mainland this year, including a pharmaceutical factory, a consumer health care products plant in Hangzhou, Zhejiang province, an animal care products plant in Nanchang, Jiangxi province, and a vaccines factory in Shenzhen.

The company, a rival of US drug maker Pfizer and Britain's GlaxoSmithKline, has had a tough time since the patents on two of its major drugs expired last year.

Sanofi is placing more bets on the China market, which accounted for 5.3 per cent of its sales last year. Having established its presence in China three decades ago, the firm is now its biggest foreign vaccine producer and its fourth-biggest maker of prescription drugs.

"The area that we've put particular emphasis on in China in recent years is building a research and development facility. We have adopted a new research model here, integrating our research work with local universities, public biotech companies and public research institutions," Viehbacher said.

Meanwhile, the company is also increasing its penetration of rural areas, providing training to doctors and nurses in county-level hospitals in the hope that they will use Sanofi's products locally.

It recently obtained approval from the central government for a liver drug it developed to be used in the country.

"This is a huge opportunity to increase access to care for liver cancer, because the only product available today is extremely expensive and not widely accessible," Viehbacher said.