Ju Ren Tang Produces Herbal Remedies “Made in Macao” for Mainland and Overseas Markets In the past decade, natural herbal medi cine has gained popularity across the world as more and more people embrace the concept of “returning to nature”. This has also brought new opportunities to the Chinese medicine industry in Mainland China, where manufacturers are competing among each other for market share. Nevertheless, issues such as the market access, standardisation and intellectual property rights are yet to follow international practices. Manufacturers often blindly copy each other and offer highly similar products. This adds to the difficulty exporting traditional Chinese medicines. Faced with the challenges resulting from the opening-up of markets as required by China’s WTO membership, the Mainland Chinese medicine industry urgently needs to learn how to promote their own brand names and explore overseas market. Both Macao’s herbal resources and its domestic market are limited as it only has an area of 26.8 square kilometres. Although there are many Chinese herbal pharmacies in Macao, most of them mainly provide in-house diagnosis and treatment and manufacture herbal pills, powders, ointments and other remedies. There are only a few Chinese herbal medicine factories in Macao. Moving to Macao with the Help of IPIM Macao’s economic prospects following its return to the Motherland are bright thanks to its unique historical background and close economic and trade ties with the European Union and Portuguese-speaking countries. Most local residents are ethnic Chinese who have the habit of using Chinese medicines and herbs to treat illnesses and keep fit. This attracts Mainland Chinese herbal medicine manufacturers who are keen to explore overseas markets and to improve product quality and competitiveness. The Wuxi Zhengdong Pharmaceutical Company from Jiangsu Province was one of the first to set up business in Macao. The Wuxi Zhengdong Pharmaceutical Industry Ltd is a typical medium-sized private share-holding company that has western medicine production as its core domestic business. Set up in 1998, the company generated an annual revenue of RMB 70 million in 2002. The company realises that it needs to develop its own unique and differentiated products so as to grow further. Therefore it formulated a series of corporate strategies in conjunction with a Mainland consultancy firm and launched research and development about new medicines. This has served as a catalyst for the birth of the Ju Ren Tang Pharmaceutical Factory (Macau) Ltd. After careful preparations, the Ju Ren Tang Pharmaceutical Factory (Macau) Ltd. was formally set up in Macao with the help of the Macao Trade and Investment Promotion Institute (IPIM) in November 2002. The total investment amount is planned to be around MOP 30 million, which will be realised in two phases. The first-phase assembly line came into operation in September 2003. In the second phase, a Chinese Medicine and herbal medicine research institute under the name of Hua Ren Medicine Technology (Macau) Ltd., covering an area of nearly 20,000 square feet, will be set up. For both phases, the company has already started to procure raw materials and packaging boxes and designed a marketing strategy. All equipments are ready. Macao Offers Low Production Costs The managing director of the company, Mr. Liu Jimin, told Macao Image his company had also considered investing in South Korea or Hong Kong before its senior management decided to set up the assembly line in Macao, namely because production costs in Macao were much lower than in Hong Kong. Besides, investors can find clients easily in Macao, as Macao is a free port and a trading platform with low tarifs and extensive relations with the outside world. Moreover, there is limited competition in Macao, whose sound IPR regime can provide appropriate protection to the development of new products and also help build confidence of importers and customers in their products. This is why Ju Ren Tang chose to set up its factory in Macao. According to Mr. Liu, recognising Macao’s close relations with the European Union and Portuguese-speaking countries, many mainland Chinese medicine manufacturers are also interested in Macao. As one of the first to move to Macao, the Ju Ren Tang Company is poised to fill in the vacuum of Macao’s Chinese herbal medicine industry. In order to gain a foothold in Macao’s local market, the Ju Ren Tang Pharmaceutical Factory (Macau) Ltd. has not only established its factory and research facilities here, but also adopted the following development strategies. Firstly, the company registered its products both on the Mainland and Hong Kong to be ready for the domestic sale of its products. Secondly, the company established the “Hua Ao Medicine Development (Macau) Ltd.” that is tasked with the import and export of Chinese herbal medicines. Southeast Asia is the start-up market, and some products will also particularly target the domestic market on the Mainland. Thirdly, his company has decided to co-operate with the 999 Group, a well-known pharmaceutical company in China, in order to set up the first “digital pharmacy” in the densely populated Macao. The so-called “digital pharmacy” functions with remote monitoring devices to provide Chinese medical services to consumers, so that complicated personnel management matters and the manual operations of traditional Chinese herbal medicine stores can be avoided. Customers can consult Chinese medical doctors in the store. Using the monitoring system, the customers can also access information about the herbs and their functions and have a look at the whole digital and pollution-free process, from selecting the herbs selection to preparing the herbal remedies. Special Treatment for Senile Dementia Ju Ren Tang’s products in Macao include: Dementia Sobriety Capsules, Dental Caries Prevention and Pain Relief Capsules, Sugar Reducibility Capsules, Rheumatism and Paralysis Pellet Capsules, etc. Mr. Liu said he believed there exist good market prospects for Dementia Sobriety Capsules, which offers treatment for senile dementia, and Dental Caries Prevention, and Pain Relief Capsules that prevent adolescent dental caries. In view of an aging society, the Ju Ren Tang spent six years on developing Demential Sobriety Capsules at the Heilongjiang Chinese Medi cine Research Institute and holding GMO animal tests in Japan before finally releasing the product. The research and development of Dental Caries Prevention and Pain Relieve Capsules is based on a survey on the Mainland. The survey shows that the chances for children to have dental caries are as high as 97 per cent to 98 per cent. Consequently, the company started to abstract effective Chinese herbal essences to prevent and cure dental caries. Mr Liu thinks that the two products are both of high technology content and high value-added. There are no other companies producing similar kinds of Chinese herbal medicine capsules on the Mainland, therefore reducing the risk of being copied. Besides, as these products are all produced in the factory in Macao under the label of “Made in Macao,” they are in a better position to tap both the domestic and overseas markets. Mr. Liu underlined the fact that there existed around 7,000 pharmaceutical factories in China. Some 2,000 or even 3,000 of the factories do, in fact, product the same type of products. Therefore, in order to be competitive, there is a need for an effective marketing strategy or unique brand name. The Ju Ren Tang Company plans to include a series of after-sales services in its brand name-building project. This includes the setting up a “consumer club” to keep track of customers’ cases and exchange information on the use of medication. This approach is different from the traditional way of Macao’s Chinese medicine and herbal remedy sector. As for the local conditions in Macao regarding the development of the Chinese medicine industry, Mr. Liu said, “The greatest difficulty lies in finding factory space”. He says that although there are a lot of empty workshops in Macao, most of them are not pollution-free, as required by the pharmaceutical industry. He suggests that the Government transform empty industrial buildings on the “Cotai” land reclamation area between Taipa and Coloane Islands and the future Macao-Zhuhai trans-border industrial park into pharmaceutical production centres, where pharmaceutical companies of different sizes could be concentrated to ensure standardised operations. Mr. Liu believes that, with the granting of new casino concessions, Macao will get ever more famous globally. At the same time, the Macao SAR Government is keen to develop the Chinese medicine and herbal remedy sectors. Macao’s pharmaceutical regulations also offer manufacturers sufficient protection. These positive factors will all contribute to the Ju Ren Tang Company’s growth in Macao. Contact |