Merck still sees double-digit growth in China

By Liang Fei in Boao Source:Global Times Published: 2015-3-29 23:18:32

Bernd Reckmann Photo: Liang Fei/GT

German pharmaceutical and chemical company Merck still sees continuous double-digit growth in China, despite the economy now having entered a "new normal" phase of slower growth but higher quality, Bernd Reckmann, CEO of the company's life science and performance materials unit, told the Global Times at the Boao Forum on Saturday.

The emerging markets, including non-Japan Asia and Latin America, surpassed Europe for the first time and contributed around 38 percent of Merck's total revenue of 11.5 billion euros ($12.5 billion) in 2014, compared with 35 percent for Europe, the company said on Saturday.

"China has been a major driver for the emerging markets," said Reckmann, noting that growth in the country will remain strong given the increasing healthcare needs and the country's move to boost innovation.

Merck has been boosting investment and manufacturing facilities in China.

In 2014, the company set up a plant in Nantong, East China's Jiangsu Province, with a total investment of 650 million yuan ($104.6 million).

The plant, expected to start commercial production in 2017, is the only Chinese facility of foreign drug firms that will be dedicated to producing drugs on the country's essential drug list.

Some European firms and commerce organizations have been voicing concerns that China's investment environment is deteriorating, given the antitrust and anti-corruption cases in the past two years.

But E. Allan Gabor, President and CEO of Merck Serono China, the company's biopharmaceutical business, said that the investment climate in China is still "quite good" and China is still a very desirable market for companies eyeing long-term development.

This is the first year of Merck's presence at the Boao Forum.

"It [the forum] is a good opportunity to understand the priorities of the Chinese government," said Gabor, adding that the company wants to play a bigger role in China's healthcare reform.

In December 2013, a liquid crystal production facility of Merck started operation in Shanghai. Alasdair Jelfs, managing director of Merck Chemicals in China, said that though some companies are moving manufacturing facilities to other Asian countries and regions because of cost concerns, manufacturing with high-added value will remain in China.

Posted in: Companies

blog comments powered by Disqus