China Pharmaceutical Enterprise and Investment has contacted property developers and mainland medicine institutes to discuss the development of a Chinese medicine centre ahead of a pending government announcement on the project. The idea of developing a Chinese medicine centre in Hong Kong was first introduced by Chief Executive Tung Chee-hwa in his policy address last year although a detailed plan has yet to be revealed by the Government. Secretary for Trade and Industry Chau Tak-hay told a Legco meeting last week the Government was now conducting a feasibility study into a Chinese medicine centre and a full report would be published in the near future. The developers contacted are understood to be Sun Hung Kai Properties and Henderson Land although both were unavailable for comment yesterday. China Pharmaceutical has already signed a letter of intent with The Pharmaceutical Group in the mainland and Canadian health-care product company Unify Power Enterprises to form a joint venture to develop a high-technology Chinese medicine industry. China Pharmaceutical will be the largest shareholder in the joint venture with a 51 per cent stake. The company will allocate $50 million to the joint venture even though the company's feasibility study into the project will not be ready until October. The firm recently raised $189 million through a share placement at $1.35 a share. The company originally planned to place 12 million shares, but increased this to 14 million due to strong demand. Executive director Ding Er Gang said that after the placement the company's debt-to-equity ratio would decrease to 40 per cent compared with 49 per cent now. Cash-on-hand will be between $70 million and $80 million after deducting costs associated with investments in new medicines and the relocation of its Vitamin C production facilities. CHINESE MEDICINE
