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Baxter draws up 1b yuan capex plan for China

By Zheng Lifei (China Daily)
Updated: 2009-05-16 09:58

US healthcare company Baxter International Inc said on Friday that it would spend 1 billion yuan ($146.50 million) in China this year to ramp up production capacity in the latest investment made by foreign drugmakers in the country.

The US drugmaker will use the funds to expand the intravenous solutions and peritoneal dialysis products output at its Guangzhou, Suzhou, Tianjin and Shanghai plants.

"The investment reinforces our commitment to China," said Paul Vibert, general manager, Baxter China. "It will also allow us to provide a significant number of jobs, which is in line with our corporate social responsibility," Vibert said.

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The investment is expected to create 2,500 jobs, of which 1,000 will be available this year, the manager said.

Baxter, the maker of intravenous drug pumps, renal and other products, realized sales revenue of $200 million from China last year.

The company, Vibert said, "is confident" that it can achieve double-digit sales growth this year despite the economic downturn.

Globally, Baxter expects a sales growth of 7 percent this year from last year's $12.3 billion, excluding the foreign currency exchange impact.

The foreign pharmaceutical industry is one of the few that still continues to increase investment in China this year even as most of the others are cutting spending as a result of the global financial crisis.

Sanofi-Aventis, the world's fourth-biggest drugmaker, said last month that it would invest $90 million in China, after a $94 million investment made in 2007.

The global pharmaceutical market is expected to grow by a mere 2.5 percent to 3.5 percent in 2009, the lowest growth rate in at least 25 years, according to US healthcare market research firm IMS Health Inc.

But China is expected to see sales grow by 13 percent to 16 percent through 2013, IMS said, forecasting that China may become the third-largest market by 2011, up from its current sixth place ranking.

China announced this year that it would invest 850 billion yuan to overhaul its healthcare system over three years.