Mumbai-based global pharmaceutical major Cipla announced today it has entered the Chinese market in a joint venture with Jiangsu Acebright. Cipla will set up a manufacturing plant for respiratory products in China under the joint venture.
A combined total investment of $30 million will be made for the joint venture. Cipla EU, a wholly-owned subsidiary of Cipla, will hold an 80% stake and Acebright will hold a 20% stake. Even though Cipla will start off with respiratory products in China, the pharma company aims to expand to other segments in the future, according to Umang Vohra, MD & Global CEO of Cipla.
"We are keen to take our well-established expertise in the respiratory segment to patients in China. Simultaneously, we will explore various routes to build a portfolio of products in other therapeutic segments such as oncology," Vohra said. He also added that China would be an important part of their future roadmap.
"While our core home markets remain our current growth anchors, we see China as a crucial part of our future roadmap. In May, we inaugurated our office in Shanghai. We have a long-standing relationship with Acebright, and this partnership to build a manufacturing facility in China is a significant step for us," he said.
Meanwhile, Shengping Xu, Chairman of Acebright Group, said: "We have a long-standing partnership of more than 20 years with Cipla which shares our vision and approach towards patients. We are pleased to strengthen our relationship with Cipla through this joint venture and strongly believe the joint venture will bring more products to Chinese patients in the respiratory segment."
This is not the first time Cipla has entered the Chinese market. In 2012, the pharma major held stakes in three different Chinese companies: 25 per cent in Biomab, 48.2 per cent in Jiangsu-based Cdymax and 16.6 per cent in Shanghai Desano Pharmaceuticals.
Cipla later rejigged its investments letting go of the stake in Biomab and Cdymax. It sold its stake in Jiangsu-based Cdymax in 2014 for $18.5 million. The share in Hong Kong-based Biomab was sold in 2015 to British Virgin Islands-based Biomab Brilliant for $25.8 million.
Meanwhile, Cipla share price has gained 0.54% or 3 points to 553.75 level in afternoon trade on BSE today after the announcement. It closed at 550.75 level in trade yesterday.