Smith & Nephew, a world leader in health-care products, is hoping to turn around its loss-making mainland sales operation next year with the help of aggressive expansion plans. Since 1994 the company has set up three offices, in Beijing, Shanghai and Guangzhou, but income has been insufficient to offset operating costs, China general manager Glendy Wang ku-te said. The British-based group has sunk about US$15 million into the mainland venture. 'We're still in an investment period, and hopefully, we will reach break-even next year,' Ms Wang said. Smith & Nephew sells health-care products such as plasters and silicone gel sheets for treatment of scars under labels such as Elastoplast and Simple. The group's Asia managing director Kabir Nath said Smith & Nephew would launch first-aid products on the mainland retail market this year after selling 90 per cent of its products to institutions such as hospitals. But he refused to discuss details of the group's strategy to meet competition from rivals such as Johnson & Johnson and Glaxo Wellcome, citing commercial secrecy and tomorrow's disclosure of the financial results for last year. Ms Wang said the group had encountered operating difficulties in the mainland, including the loss of many well-trained staff and heavy promotion costs. 'Like other major international companies, we have been trying very hard to retain staff,' she said. Smith & Nephew now has 70 staff in the mainland. In 1997, the Asia-Pacific region accounted for 17 per cent of the group's GBP1 billion (about HK$12.57 billion) in sales.