DCPC: Riding High Tide and Creating High Value

Marching towards the new era of second business expansion

Faced with a great number of pharmaceutical corporations and the localization of international market competition, Beijing Double-Crane Pharmaceutical Co., Ltd. (DCPC, SH: 600062) has realized that only if the company completes a dramatic transformation of equity, management, work process and personnel strategy in the new circumstances of market competition can it develop itself into an innovative corporations. Compared with the first business expansion, the market is more complicated and changeable and challenges and opportunities exist side by side in the second business expansion. They realized the concept of "human orientation".    Starting from this concept, the Board of Directors of the company has proposed the strategic target of becoming a leader in sectors of perfusion fluid, blood pressure reduction and blood sugar reduction. In 2005 the company implemented an overall development strategy for the second business expansion and successfully created famous brand products in those three sectors.    The future competition is the competition of famous brand products. Famous brand products are the life for the development of the company.    Centering on the core strategy, DCPC has acquired a series of famous brand products such as compound hypotensive tablet, ofloxacin and gliquidone tablet and also established large perfusion fluid regional production bases. Perfusion fluids produced by DCPC and its controlled companies hold a 12% share of the perfusion fluid market in China. Compound hypotensive tablet is a key product in the company. Its sales revenue was nearly RMB500 million in 2005 and the planned sales amount is 850 million pieces in 2006. Gliquidone tablet produced in the company has a sales revenue of nearly RMB200 million a year and firmly holds a leading position in oral drugs for blood sugar reduction.

R&D to promote the adjustment of product portfolio

In the implementation of the overall strategy for the second business expansion, the company has reshaped enterprise culture, increased management level, made effective use of resources, conducted readjustments to product portfolio, designed scientific management system, emphasized performance, highlighted value creation.    Double-Crane Pharmaceutical Co., Ltd. has devoted itself to the creation of the most famous brand perfusion fluid in China. The readjustment and innovation of the product portfolio is one of the motive forces for the sustainable development. The future perfusion fluid market will have fierce competition in both low-end and high-end products. The company conducted readjustment to product portfolio in relation to these two aspects in 2005. Besides, the company also signed contracts on two projects for the joint development of perfusion fluids with high added value. One is the project for the joint development of patent oxygen containing perfusion fluids with an American company. At the time of making readjustment to product portfolio, the company also seized opportunities offered by the state policies, intensified readjustment to packing and expanded the production of plastic bottles and plastic bags.    The massive input made by the company in research and development has laid a sound foundation for the development of new products. The company put RMB44 million in research and development in 2005 and the preliminary budget for research and development is RMB73 million in 2006.

Infrastructure adjustment to expand sales

Research and development is the core motive force for innovation. Advanced marketing, distribution and management are the reflection of comprehensive strength in the company.    Double-Crane Pharmaceutical Co., Ltd. made readjustment to infrastructure in its headquarters in 2005. Efforts were made to adapt the infrastructure, the personnel and the product portfolio to the management mode of enterprise group. The transformation of production departments was promoted and the financial management was also optimized.   The perfusion fluid department newly established has made reformation to businesses of subsidiaries outside Beijing to enhance the market competitive edge of perfusion fluids and lay a foundation for the attainment of the strategic target of "creating the most famous brand perfusion fluid".   The marketing mode of drugs for blood pressure reduction is also undergoing changes. It is being transformed from the "office mode" to the "three-line mode". Community education, public welfare advertising and clinic dissemination are highlighted. Community libraries have also been set up in collaboration with relevant departments of the state to communicate knowledge in drugs for endocrine diseases.   The company owns gliquidone tablet, a well-known drug for endocrine diseases. Gliquidone tablet has become a leading oral drug for blood sugar reduction in China. It accounts for 23.1% of xanthurea oral drugs for blood sugar reduction and holds a share of 93% in the entire gliguidone tablet market. It has gained high reputation in consumers and has been assessed to be a product of consumer satisfaction in drugs for diabetics.    The future focus of the company will be laid on the development of the three core sectors with competitive edge and brand advantage including perfusion fluid, blood pressure reduction and blood sugar reduction and also the improvement of the profit-earning ability.