First China Overview
|Keys to Success|
|First China Pharmaceutical Group is one of a few pharmaceutical distribution companies in Yunnan Province to be granted a "License of Internet Pharmacy Information Service" allowing online marketing and order processing.
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|First China Pharmaceutical Group is positioned to achieve near-term growth by dramatically expanding its product offerings, leveraging online ordering in order to bypass city and county distribution layers, increasing its customer base, and acquiring other established distributors.
|The Chinese pharmaceutical market is growing more than 20% per year. China is on track to become the third-largest prescription drug market next year, with sales expected to grow by $40 billion by 2013 as the country improves its healthcare infrastructure.
First China Pharmaceutical Group, Inc. is a growing pharmaceutical distribution company providing pharmaceutical products to drug stores, medical clinics and hospitals in the People’s Republic of China. As part of its business strategy, the Company has acquired the assets of Kun Ming Xin Yuan Tang Pharmacies Co. Ltd. (XYT) of Yunnan Province (pop. 45,710,000). XYT was a profitable provincial pharmaceutical distributor offering approximately 5,000 health products—1,000 over-the-counter drugs, 1,000 prescription drugs, 2,000 prepared Chinese medicines and 1,000 supplements. Currently the Company has over 4,700 customers and supplies approximately 10% of their inventories. The company was founded in 2002 with offices and warehouse space in Kunming City, Yunnan Province and originally achieved profitability in 2003.
First China Pharmaceutical Group has a significant strategic advantage over most of its competitors as it has acquired a "License of Internet Pharmacy Information Service" in Yunnan Province, enabling the organization to bypass municipal and county pharmaceutical distributors and provide products directly to its pharmacy, hospital and clinic customers. The process of reviewing applications for online drug distribution has been suspended by the Chinese government due to several cases of fraud where prescription drugs have fallen into the hands of unlicensed practitioners.
First China Pharmaceutical Group will leverage its ability to fulfill orders over the internet to cut out two distribution layers and approximately 40% in total pricing markup. By bypassing city and county distributors, the Company will be able to achieve higher margins while providing pharmaceuticals to pharmacies, hospitals and clinics at costs below the current distribution model.
First China Pharmaceutical’s short term objective is to broaden its product line from 5,000 products to 30,000 and include significantly more Western medicines as well as traditional Chinese drugs and herbs. By expanding its product line six-fold and offering products at a lower price than major competitors, the Company expects to be able to become its customers’ primary distributor, supplying more than 80% of the pharmaceutical products they require. In addition to selling significantly more products to its 4,700+ existing customers, the Company plans an aggressive sales and campaign to attract 5,000 new primary customers.
Advantageous Corporate Structure
First China Pharmaceutical Group is a public company that owns 100% of First China Pharmaceutical Group, Limited (FCPG-HK), a Hong Kong company that in turns owns 100% of Kun Ming Xin Yuan Tang Pharmacies Co. Ltd. (XYT). This corporate structure was created to establish XYT as a Wholly Foreign Owned Enterprise (WFOE), a limited liability company operating in China and wholly owned by foreign investors. WFOE’s enjoy regulatory, revenue, currency, intellectual property protection and financial advantages over domestic joint venture partnerships in China.
First China Pharmaceutical Group’s management team has a wide range of executive and operating experience. All have been involved with successful start up companies and have a thorough knowledge of the pharmaceutical industry in China.
First China Pharmaceutical Group’s management team has a wide range of executive and operating experience. All have been involved with successful startup companies and have a thorough knowledge of the pharmaceutical industry in China. View management section.