China Pharmaceutical Equipment Industry Report, 2011-2012

In recent years, Chinese pharmaceutical equipment industry has witnessed significant growth in both product quality and technological content, as well as steady rise of sales volume. According to China Association For Pharmaceutical Equipment (CAPE), the gross output value of Chinese pharmaceutical equipment industry hit RMB12.83 billion, up 37.1% YoY, the sales grew 50.1% year on year to RMB12.86 billion, and the total profit increased 68.1% YoY to RMB1.383 billion in 2010.

As the products of Chinese pharmaceutical equipment industry are characterized by various types, the enterprises generally adopt the business model of customization, so the industry presents a low degree of market concentration, with CR4 approximating 20%-25%. Presently, domestic major pharmaceutical equipment companies, for instance, Shinva Medical, Tofflon and China Sun Pharmaceutical Machinery, mainly focus on drying, sub-packaging and sterilization facilities. It is expected that the market size of sterilizer, freeze dryer and large volume parenteral (LVP) production line will hit RMB6.5 billion, RMB7.5 billion and RMB1.2 billion respectively in 2013 fueled by factors including the industry transformation caused by new GMP.

The development of pharmaceutical equipment industry is closely related with factors including the status quo and market capacity of pharmaceutical industry. Foreign pharmaceutical equipment enterprises, such as Bosch and IMA, basically monopolize foreign-funded pharmaceutical market in China by virtue of their advantages in brand and technology, while domestic pharmaceutical equipment companies dominate domestic-funded pharmaceutical market by their edges in price and localization, for example, the disinfectors and sterilizers of Shinva Medical occupy more than 70% of the market share. However, the share of foreign pharmaceutical equipment companies in the domestic-funded pharmaceutical market is likely to grow.

Since 2010, the introduction of new GMP certification and new emission standard for water pollutant and the availability of "Key New Drug Innovation" earmark have stimulated the production scale expansion, existing equipment transformation and upgrading of pharmaceutical companies. From January to September of 2011, the investment in fixed assets of Chinese pharmaceutical industry totaled RMB182.64 billion, rising 39.9% year on year. Driven by the pharmaceutical industry, the sales of pharmaceutical equipment industry also saw a surge. The sales of pharmaceutical equipment industry are estimated to continue rapid growth in 2011-2012 and reach a peak between 2013 and 2014.

The report covers the followings:

• (1) Status quo of Chinese pharmaceutical equipment industry, including industry development, industry concentration, entry barriers, competition pattern, current situation and trend of industry technologies, etc.
• (2) Industry chain of Chinese pharmaceutical equipment, covering the impact of upstream sectors on the industry, current situation of downstream pharmaceutical industry and the impact of new GMP on the industry, etc.
• (3)The forecast of Chinese pharmaceutical equipment market size and three major market segments of sterilizer, drying equipment and LVP production line, enterprise development pattern and market competition trends.
• (4) The production, operation, investment, M & A, and development forecast of 10 major pharmaceutical equipment producers in China, including Shinva Medical, Tofflon and China Sun Pharmaceutical Machinery, etc.

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