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Export Opportunity for CM Extract Industry through GMP

In the face of global economic crisis, pharmaceutical industry in Europe and the US will continue to suffer.  Exports of plant extracts and prepared Chinese medicinal herbs from China will slow down.  In a forum organized by China Chamber of Commerce for Import & Export of Medicines & Health Products (CCCMHPIE) in December 2008 in Xi’an, the pressing issues of how to ensure the healthy development of the plant extract industry were discussed.  Consensus was reached in stepping up industry self-discipline, quality assurance system, investment in R&D, and the rolling out of high-value-added product etc.  In addition, CCCMHPIE was also formulating plans to assist potential plant extract companies in achieving the US Dietary Supplement cGMP.  

The theme of the forum was how to ride out the storm of financial crisis.  Mr. Liu Zhang Lin, the Vice President of CCCMHPIE delivered a keynote speech on the impact of the financial crisis on pharmaceutical industry and the way forward.  Over 40 participants spoke at the forum and shared their views on the international market, safety standards, capital investment and product application etc.  Whilst plant extract products are considered non-elastic consumer goods, according to the data published by CCCMHPIE,  the effect on the export of pharmaceutical goods was expected to emerge later as a result of the financial downturn.

In the first 10 months of 2008, the price of mainland plant extract rose while the quantity shrank.  Accumulated volume of export totaled 26,000 tons (-11.7%) while the value increased to USD430 million (+12.6%).  The economic downturn also changed the export destinations.  The top 3 destinations in the first 10 months were Japan (USD100 million), US (USD59 million) and Mexico (USD34 million), but the third place was taken over by South Korea in the overall year ranking.  Experts anticipated that the growth rate of the global medical industry would fall by 1-2%, but more significantly in the US (2-3%).    The plant extract industry generally considered that proper control of cash flow, due customer vetting and cost reduction would be the key concerns. CCCMHPIE will closely monitor the development and help prepare the industry for the challenges ahead.

Plant extract had been one of the hit items in the CPhI & ICSE China 2008 (a  pharmaceutical and food ingredient trade show) with an expanding portfolio of exhibitors.  However, the situation gradually deteriorated in the last 6 months and was expected to continue in the coming days.  The industry must stand ready and equipped themselves for riding through the storm.  According to a survey conducted by CCCMHPIE last October, 40% of the companies believed that the financial crisis would strike the industry substantially.  Only 18% consider the opposite while 27% were not sure.  The main causes were considered to be the shrinking of purchase orders, falling price, and higher credit risks.  The impact might vary from product to product (ginko extracts, for instance not significantly affected).  To cope with the situation, industry standards are being devised to help boost export.

Some participants of the forum pointed out that the safety and quality of Chinese products had been under the spotlight globally.  At the same time, state control and monitoring has also been elevated to the highest level ever.  As plant extracts are widely adopted in drug, health food and food additives, industry has to exert their utmost to ensure the safety and quality of the products and to meet the requirements of importing countries.  CCCMHPIE also suggested that potential companies should prepare themselves to achieve the US Dietary Supplement cGMP to strengthen the country's international reputation and sustain the development of the industry.

Source:
Medicine Economic News  www.yyjjb.com.cn