Table 2 Global API Market Size and Growth Rate from 2016 to 2023

In the current competitive landscape of the global API market, American enterprises have drug patent advantages, Western European enterprises have process advantages, while the API enterprises represented by developing countries such as India and China have relative cost advantages. Based on the gaps in research and development, production processes, and intellectual property protection, the API enterprises from developed countries in Europe and America dominate the high value-added API field; while the API enterprises from countries such as China and India have continuously elevated their position in the API market of generic drugs due to their cost and scale advantages, etc.

Seeing comprehensively from indicators such as the sales share and the number of export destinations of APIs, among the Top 5 API manufacturers (exporters) in the globe, there are 4 in India, with absolute advantages. Although there are hundreds of API export companies in China, only a few companies such as North China PharmaceuticalGroup, Northeast General Pharmaceutical Factory, Harbin Pharmaceutical, Zhejiang Hisun Pharmaceutical Group and Zhuhai United Laboratories Company have relatively large export scales. The vast majority of domestic API exporters are generally small in scale, so Chinese enterprises rank lower in the international API manufacturer rankings.

3. Current situation of API market in China

Before the 1990s, Europe and the United States were the main global production areas of APIs. After the 1990s, due to environmental protection, labor costs, and other reasons, production capacity in Europe and the United States gradually shifted outward, and emerging markets represented by China and India rapidly emerged, gradually becoming the main production and export countries of APIs.

In recent years, China has successively introduced various industrial policies to guide the domestic API industry towards high-quality development, and the API industry has also ushered in new development opportunities. According to China Mehecodata from China Chamber of Commerce for Import and Export of Medicines and Health Products (CCCMHPIE), China has been the world’s largest API manufacturer and exporter for many years. The production capacity of multiple API varieties ranks first in the world or holds a significant market share. The overall production capacity of APIs in China ranks first in the world, accounting for nearly 30%.

The overall production capacity of APIs in China showed an increasing trend from 2013 to 2017; However, from 2018 to 2019, due to the tightening of environmental safety supervision and the constant deepening of supply reform, some API production capacities with high energy consumption, high pollution and outdated process technology, as well as excess API production capacity were eliminated, resulting in a significant decline in China’s API production capacity; In 2020, despite the impact of the global epidemic situation causing a slight slowdown in the growth of the API market, with the gradual stabilization of China’s epidemic prevention and control situation and the recovery of the global economy, the API industry quickly regained vitality and demonstrated a strong development momentum. By 2023, China’s API production capacity has jumped to 3.949 million tons, with a year-on-year growth of 8.91%. This Table not only demonstrates the new style of China’s API industry after experiencing trials and hardships, but also indicates its huge development potential in the future.

Table 3 Output and Growth Rate of Chemical APIs in China from 2017 to 2023

4. Development prospect and trend of the industry

In recent years, China has vigorously promoted supply-side structural reform, mainly relying on supervision and guidance to gradually eliminate outdated production capacity, encouraging the API enterprises to make transformation and upgrading, and increasing efforts in standardization of the API market to crack down on illegal price increases and malicious sales control behaviors. On the one hand, by reasonably raising the environmental standards, it has guided the leading enterprises to improve their technological level and enhance their competitiveness, promoted high-polluting and non-compliant enterprises to exit the market, and reduced low-priced competitors in the API market; On the other hand, it has issued the Guidelines for Price Behavior of Shortage Drug and API Operators to punish malicious manipulation of API prices. The integration of production capacity, improvement of processes, and maintenance of reasonable profits will lay a more solid foundation for the sustainable and healthy development of China’s API industry in the future. It is predicted that by 2029, the market size of enterprises above designated size in China’s chemical API industry will have exceeded 740 billion yuan, with an average annual compound growth rate of 4.2%.

Faced with the rapid changes and fierce competition in the global pharmaceutical market, domestic API enterprises need to further strengthen their technological innovation and industrial upgrading. With the support of national policies and the increasing demand for social development, China’s API industry will continue to develop towards high quality, green, low-carbon, environmental protection, and internationalization, gradually transforming from a major API manufacturing country to a manufacturing power, and making more outstanding contributions to the development of the global medicine industry.

1.1.3 Technical analysis

The project is technologically advanced, reliable, and has mature processes, with guaranteed product quality, as well as mild and clean production conditions. The project scientifically solves the environmental problems, and will not cause environmental pollution, with significant social benefits.

1.1.4 Advantageous conditions of project construction

(1) Policy advantages

The 14^th Five-year Plan for the Development of the Medicine Industry required consolidating the advantages of API manufacturing, accelerating the development of a number of new varieties of characteristic APIs with high market potential and technical barriers, as well as new product types such as nucleic acids and peptides, vigorously developing the contract production business of APIs for patented drugs, and promoting the extension of the API industry to higher value chains.

The State Administration for Market Regulation has issued the Measures for the Supervision and Administration of Drug Production, making stipulations on the production license, production quality management standards, commissioned production, and acceptance of inspections for “APIs”, including implementation of production license management for API enterprises.

The National Development and Reform Commission and the Ministry of Industry and Information Technology have issued the Notice on the Implementation Plan for Promoting the High-Quality Development of the API Industry, aiming to have developed a batch of high value-added and high growth varieties, broken through a batch of green and low-carbon technology equipment, cultivated a group of leading enterprises with international competitiveness, and created a group of globally influential industrial clusters and production bases by 2025.

The Outline to Improve Quality of Development proposed to strengthen the full life cycle management of drugs and vaccines, promote the accelerated review and approval of clinical urgently needed and rare disease treatment drugs and medical devices, improve the ability of drug inspection and testing, and the batch issuance of biological products (vaccines), optimize the traditional Chinese medicine (TCM) review mechanism, accelerate the research and development of chemical APIs and TCM technology and upgrade their quality standards, and enhance the consistency of quality and efficacy of generic drugs with original drugs and patented drugs.

The Outline of the 14th Five-Year Plan for National Economic and Social Development and Vision 2035 of Jilin Province proposed to strengthen TCM, and promote the secondary development and application of large varieties, new dosage forms, new administration routes, and new indications. Accelerate the development of biopharmaceuticals, restore the leading position of biological vaccines in China, break through the technology of genetic engineering drugs and cell pharmaceuticals, and consolidate and expand the leading advantage in the field of recombinant proteins. Cultivate and develop high-end chemical pharmaceutical preparations and establish chemical API export bases. Build medicine characteristic industrial parks in Liaoyuan, Tonghua, Baishan, Meihekou, and Dunhua, etc., and establish a national production base for small variety drugs in Northern China. By 2025, the graphene market size will have reached 200 billion yuan.

The Notice of the Office of the Baishan Municipal People’s Government on Issuing the Outline of “Healthy Baishan 2030” Plan proposed to expand the chemical pharmaceutical industry, accelerate the research and development and industrialization of innovative drugs and new preparations, strengthen the first and rush imitation of patent expired drugs, as well as the development and industrialization of generic drugs. Vigorously develop chemical pharmaceuticals, modern TCM and deep processing of traditional Chinese medicinal materials, health products, cultivate biopharmaceuticals, and promote the development of the special medical food industry. Promote the transformation and upgrading of the medicine circulation industry, reduce the circulation links, improve the concentration of the circulation market, and form a batch of large-scale drug circulation enterprises. Encourage leading enterprises such as Shihuida Pharmaceutical and Changbaishan Pharmaceutical, etc. to develop into large groups, and form a batch of large enterprise groups and well-known brands with influence both inside and outside the province.

(2) Resource advantages

There are two major water systems, the Yalu River and the Songhua River, in Baishan City. There are 55 large rivers, including the Yalu River, the Songhua River and the Hunjiang River, with a drainage area of more than 100 square kilometers. The main reservoir areas of the famous Baishan Power Station and Yunfeng Power Station are located in Baishan City. The total annual average volume of water resources of the city is 8.025 billion cubic meters. The per capita volume of water resources is 2.7 times the national one. The theoretical reserves of hydropower are 1.061 million kilowatts, and the exploitable hydropower resources are 842,000 kilowatts.

Due to its unique latitude, climate, temperature and humidity, Changbai Mountain has nurtured high-quality and unique varieties of genuine traditional Chinese medicinal materials. There are over 900 species of medicinal plants such as Ganoderma lucidum, Rhodiola cretinii, Eleutherococcus senticosus, Gastrodia elata, and Oenothera biennis, etc. Among the 363 key medicinal species surveyed nationwide, there are 137 species in Changbai Mountain area. Baishan City, located in the hinterland of Changbai Mountain, has up to 875 species of medicinal materials. It is the largest natural medicinal material bank in Northeast Asia and the core production area of Chinese ginseng, the “King of All Herbs”. It is included in the WTO Original Region Product Protection Scope. It is known for “referring the world ginseng to Chinese ginseng, referring the Chinese ginseng to Jilin Ginseng, and referring the Jilin ginseng to Baishan”. The annual collection of wild Chinese medicinal materials is up to 15,000 tons, and the produced medicinal materials are characterized by being natural, green, pollution-free and having high medicinal value, with enormous economic value and development potential.

(3) Industrial advantages

Shihuida Pharmaceutical, a leading enterprise in Baishan City, has ranked first in the number of drugs used in hospitals and retail market sales amount for nine consecutive years in China. It has once again been listed as one of the “Top 100 China Medicine Industry Enterprises in 2022”, and has become the most growing enterprise in the China medicine industry in 2023. It has independently developed the “Levamlodipine/Bisoprolol Tablets” and completed the Phase II clinical trials, and striven for a provincial high-quality development special fund of 1.42 million yuan. The HPLC characteristic chromatogram construction method of Changbaishan Pharmaceutical’s Jingqi Shuangshen Capsules won the Silver Award of the 4^th Provincial Patent Award. It has successfully introduced 7 new medicine varieties such as Shengbai Kangfu Oral Liquid, and has won approval for production of the new Tianlitai variety “Wannianqing Tongluotie”, and completed the research and development of the new TCM preparation Telmisartan and Amlodipine Double-layer Tablets in Fusong County. Key projects such as Hunjiang High-tech Medicine Industrial Park, Mingquan Pharmaceutical TCM Decoction Pieces, China Resources Heshan Tang New Factory, and Hengkang Biopharmaceutical’s Ginseng Series Deep Processing, etc. are accelerating their implementation, further enhancing the development strength of the medicine and health industries.

(4) Talent advantages

There are 63,800 professional and technical talents in Baishan City; There are 13,000 highly skilled talents, including 39 young and middle-aged experts who have made outstanding contributions; and 13 top-notch innovative talents, having formed a talent team that has initially taken shape, with a relatively complete range of categories and gradually strengthened overall strength. There is Changbaishan Vocational Technical College in the urban area, which is a public ordinary university with higher education enrollment qualifications approved by the Jilin Provincial Government and registered with the national education system. The College is a multi-level and multi-class teaching-oriented higher vocational college that mainly focuses on higher education, takes into account secondary vocational education, and also carries out social training and vocational skills certification education. The College has 18 higher vocational majors for national enrollment and 12 secondary vocational majors for provincial enrollment. The College's training center offers skill training and vocational qualification education for over 30 projects in six major categories, with an annual training capacity of 5,000 person times.

(5) Location advantages

Jiangyuan District is located in the central area of six counties (cities, districts) in Baishan City. It is a must pass point for Liaoning, Hebei, Shandong, Beijing and other places to reach Changbai Mountain Tourist Scenic Area via National Highway 201. It is 270 kilometers away from Changchun Longjia Airport, 100 kilometers away from Changbaishan Airport, 90 kilometers away from Tonghua Airport, 50 kilometers away from Linjiang Port, 162 kilometers away from Ji’an Port, and 392 kilometers away from Dandong Port. It is a logistics hub, and its service scope is not only based on the economic development of Jiangyuan itself, but also covers surrounding counties and districts that must pass through Jiangyuan District in transportation, as well as major cities outside the region, with obvious location advantages.

Highways and railways crisscross the Jiangyuan District, with 5 national and provincial trunk highways including the Hegang-Dalian Expressway and Shenyang-Changbaishan Expressway running through the area, and two railway trunk lines, the Hunjiang-Baihe Railway and the Yayuan-Dalizi Railway, connecting the north and south. The Hegang-Dalian Expressway and Linjiang-Huinan Expressway have been completed and opened to traffic, and the urban area is 5 minutes and 15 minutes away from the two expressways, respectively by car. Jiangyuan has formed a 1-hour economic circle in Baishan City. With the successive completion of high-speed railway and airport, Jiangyuan District will form a 3-hour economic circle with Beijing, Dalian, Shenyang and other places, making it more convenient and smooth to make element sharing.

1.2 Contents and scale of project construction

The project covers an area of 51,612.42 square meters, and includes the purchase of production equipment and the construction of supporting facilities such as production workshops, hazardous goods warehouses, and comprehensive buildings.

1.3 Total investment of the project and capital raising

1.3.1Total investment of the project

The total investment of the project is 214,042,800 yuan, including the construction investment of 184,042,800 yuan and current funds of 30 million yuan.

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales income will be 270 million yuan, its profit will be 40 million yuan, its investment payback period will be 8 years (after the tax, including the construction period of 2 years), and its investment profit rate will be 18.69%.

Note: “10 thousand yuan” in the table is in RMB

1.4.2 Social evaluation

After the completion of the project, it will comprehensively improve the development layer and level of the medicine and health industry, and add new impetus and gathering new momentum for the innovation, upgrading and vigorous development of the medicine and health industry in Baishan City. Meanwhile, it will also provide new employment opportunities for the unemployed in the society, and greatly improve the income and living standards of local residents. It can greatly change the living conditions and quality of life of the local people, increase new economic growth points in the region, and is of great significance to the development of the local economy.

1.5 Cooperative way

Joint venture, cooperation, or sole proprietorship, other ways can be discussed in person.

1.6 What to be invested by the foreign party

Funds, other ways can be discussed in person.

1.7 Construction site of the project

Jiangyuan District, Baishan City.

1.8 Progress of the project

It is in the process of investment promotion/

2. Introduction to the Partner

2.1Basic information

Name: Commerce Bureau of Jiangyuan District, Baishan City

Address: Building 25, Fuqiang Phase 2, Jiangyuan District, Baishan City

2.2 Overview

Jiangyuan District is located in the southeast of Jilin Province. Located between east longitude 126 ° 23 ′ -127 ° 11 ′ and north latitude 41 ° 48 ′ -42 ° 13 ′, it borders Fusong County to the east, Liuhe County and Badaojiang District to the west, Linjiang City to the south, and Jingyu County to the north. The distance between its east and west is 69 kilometers, and the distance between its north and south is 44.4 kilometers, with a total area of 1,348 square kilometers.

Jiangyuan District has always adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implemented the important instructions of General Secretary Xi Jinping’s inspection of Jilin, focused on the core strategic arrangements and overall leadership direction of the Municipal Party Committee, based on the new development stage, implemented the new development concept, integrated into the new development pattern, created new development advantages, adhered to the principles of ecological development, industrial strength, characteristic enrichment, and innovative development, deeply implemented the “one, one, five and one” development strategy, persisted in revitalizing stock, expanding increment, and striving for excellence, solidly carried out the “six stability” work, fully implemented the “six guarantees” task, continuously created a new situation of green transformation and high-quality development, and vigorously advanced towards the second centenary goal of building a great modern socialist country in all respects.

In 2024, the main expected goals for the economic and social development of the entire region are to: achieve a regional GDP growth rate of over 7%; growth rate of the total output value of industrial enterprises above designated size by over 20%; growth rate of fixed assets investment of the whole society by over 8%; growth rate of the total retail sales of consumer goods by over 8%; and growth rate of per capita disposable income of urban and rural permanent residents by over 6% and 8%, respectively.

2.3 Contact method

Contact unit: Baishan Municipal Commerce Bureau

Contact person: Zhu Yuze

Tel: +86-439-3367020

   +86-15844990231