Cipla and Jiangsu Acebright enter Chinese JV

Indian drugmaker Cipla will be setting up a manufacturing plant in China under the joint venture, the combined investment for which is US$30 million

July 14, 2019

Cipla will hold 80 per cent stake in the joint venture while Jiangsu Acebright will hold the rest

The partnership will start with respiratory products, and aims to expand to other segments

The deal comes a year after China started conducting training for Indian pharma companies

India's pharma exports rose by 3% to US$7.3 billion in 2017-18, with just 2.5% going to China

In a move that will bolster pharmaceutical trade between India and China, Cipla announced a joint venture with Jiangsu Acebright. Cipla will be setting up a manufacturing plant for respiratory products in China under the joint venture, the combined investment for which is US$30 million. Cipla will hold 80 per cent and Acebright 20 per cent of the venture.

Umang Vohra, MD & Global CEO of Cipla, said, “While our core home markets remain our current growth anchors, we see China as a crucial part of our future roadmap…” The announcement comes a year after China started conducting specific training for Indian pharmaceutical companies that aimed to raise exports to markets in the country. The trainings helped Indian firms to understand China’s regulatory environment as well as local market demand. The initiative was expected to boost India’s exports to China, and seems to have borne fruit in the joint initiative between Cipla and Acebright. 

Bilateral trade between India and China was earlier recorded at nearly US$90 billion during 2017-18, reporting a jump of 25 per cent from the previous year. While China has maintained its position as India’s largest foreign trade partner, the transactions so far have been import-heavy for India. However, with more joint ventures between the two countries, there is an aspiration to strike a better balance in transactions.

Pharmaceutical products represent one of the leading export items for India, with exports rising over 41 per cent over the past four years. The nation is the world’s largest manufacturer of generic drugs, and supplies 50 per cent of the global demand for a wide range of vaccines and more than 80 per cent of the antiretroviral drugs used worldwide to combat AIDS. 

Pharmaceutical exports from India reportedly jumped 11 per cent to reach a record-high level of US$19.2 billion in 2018-19 owing primarily to high demand from North America and Europe, according to a report by the Press Trust of India on April 23, citing data from Ministry of Commerce and Industry. 

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