Chinese medicines drive Zhongzhi growth

Zhongzhi Pharmaceutical Holdings, which operates a network of pharmacies in the Guangdong province of China, has reported strong sales and earnings growth.

Zhongzhi develops, manufactures and sells Chinese patent medicines, herbal remedies and food products sold under the core brands of Zeus, Liumian and Caojinghua.

In the six months to June, the group achieved sales of RMB347.3 million, an increase of 20.6 per cent on the same period last year. Sales of ‘modern’ herbal remedies rose 44.5 per cent as a result of the group’s effort to expand its distribution and marketing network.

“The continuous growth in the PRC pharmaceutical industry has been driven by favourable demographic trends, continuing urbanisation, the overall economy’s healthy expansion, and income growth which encourage greater public health awareness and consumption of pharmaceutical products,” the company said in its half year report.

“The demand on pharmaceutical products will remain high and the related consumer expenditure is expected to increase year by year, which is beneficial to the further growth and development of the group. As such, it is anticipated that stable sales growth of our own-branded products in the PRC will continue in the near future.”

In the year ahead, the company plans to expand its pharmacy network in the Guangdong province, boost its distribution network and expand its production capacity at the same time as putting more resources into researching new products and brand awareness marketing.

Zhongshan has been operating chain pharmacies in Zhongshan under the Zeus banner for the sale of pharmaceutical products since 2001. As at June 30 it had 201 self-operated chain pharmacies in Zhongshan, five more than last year. Pharmacy sales increased by 15.9 per cent to RMB171.5 million for the six months, contributing 49.4 per cent of the company’s total revenue.