Taiko Pharmaceutical to open Shenzhen unit to respond to growing demand

21, Apr. 2020

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TOKYO, NNA – Taiko Pharmaceutical Co., known for its digestive medicine Seirogan, said Monday it would set up a wholly-owned sales subsidiary in Shenzhen, southern China, to capitalize on the growing demand for pharmaceutical products in the country.

Taiko Pharmaceutical (Shenzhen) Co. is scheduled to be launched in May and will be capitalized at 3 million yuan ($423,700). It will sell Seirogan, as well as Cleverin, sanitation control product, as part of its infection control business.

Taiko spokesman Ryota Nakagawa told NNA on Monday the firm has been selling Seirogan and other products to Chinese agencies via a subsidiary in Hong Kong for about 10 years. The company’s annual sales in China have hovered around 500 million yen to 800 million yen in recent years.

By setting up the local subsidiary, Taiko, based in the western Japan city of Osaka, is aiming to further boost its sales in China.

Nakagawa said the company sees potential demand for both its central product Seirogan and Cleverin in China.

“In the business year ending in March 2019, we estimated the sales of Seirogan in China at only some 700 million yen while we projected that our domestic sales would be 3.8 billion yen. Considering the scale of the Chinese market, we could sell more,” he commented.

Regarding Cleverin, Nakagawa said, “The demand for the product will further expand since awareness of the need to prevent infectious diseases is growing among Chinese consumers.”

Taiko Pharmaceutical is further striving to increase its sales of Cleverin overseas. It will take over Cleverin sales business in Taiwan from its local agency Fortune River Biotech Inc. (FR) for 50 million yen, it also said on Monday.

The company will acquire the business from FR through local subsidiary Taiwan Taiko Pharmaceutical Co. by the end of April.

FR began selling Cleverin five years ago, according to Nakagawa. Thanks to the establishment of a marketing method and other efforts, the sales of the sanitation control product on the island are estimated to have significantly expanded to some 190 million yen in the business year of 2019 from about 20 to 30 million yen a year earlier.

“In Taiwan, we succeeded in establishing the recognition of Cleverin among consumers over a shorter period than in Japan by taking advantage of our know-how on influencer marketing,” Nakagawa said.

After taking over the sales of Cleverin from FR, Taiko is poised to expand its sales of the product by investing in advertisements and other promotional activities.

Taiko is also exploring the possibility of marketing Cleverin, using a similar method, in Thailand, Singapore, Indonesia, and other markets where the company has not begun selling the product yet.