What do you think of the Japanese giant's $250 million acquisition of a century-old Chinese traditional medicine company? What is the reason for the frequent investment moves in Chinese medicine by mu

What do you think of the Japanese giant's $250 million acquisition of a century-old Chinese traditional medicine company? What is the reason for the frequent investment moves in Chinese medicine by multinational drug companies?

Recently, a news story about the acquisition of a Chinese medicine company from China by a Japanese company owned by Tsumura has caused a certain stir on social networks.

The incident took place at Shaanxi Ziguang Tatsumura Pharmaceuticals, a Chinese medicine company that is one of the oldest in China, with a history of 115 years. And the stake in this enterprise was sold to Japan's Heian Tsumura for 250 million yuan. The news caused a major reaction on the Internet as soon as it came out.

Seeing this news, netizens are very angry, righteous indignation on the Internet to vent their emotions, lamenting the stormy Chen Ji Pharmaceutical "new owner" overnight into a Japanese company, can not accept this reality. In my opinion, instead of venting emotions, we should really think about how to solve the so-called "Chinese origin, South Korea, the results of Japan" dilemma. If our own business is well run, it is reasonable to say that we go to buy other people's businesses, not others to buy our business.

Then calmly look back at the past, in fact, Japanese companies to buy Chinese traditional Chinese medicine enterprises is not a new thing. As early as ten years ago, Japanese companies have begun a series of acquisitions of Chinese traditional Chinese medicine enterprises. Judging from the current situation, this phenomenon is unlikely to diminish in the future.

And for Tatsuji Pharmaceuticals 100 years of business road, can be said to be the epitome of the times, Tatsuji Pharmaceuticals was initially started in good faith, after the liberation of the state-owned, market-oriented reforms into the difficulties, and finally a few changes of hands after the gradual decline of the ...... The company has stepped into the difficulties of business development since 2010.

Later, Huazhong Kangtai also explained in the announcement, is due to Tatsuji Pharmaceuticals is building the production base required capital expenditure is relatively high, resulting in an increase in the risk of investment, the company hopes to focus on funds to invest in its other industries. In other words, Tatsuji Pharmaceuticals had previously planned to invest 500 million in production expansion projects, due to relatively high capital expenditure, and finally became one of the main reasons for the transfer.

As for whether the Chinese medicines produced by foreign companies after taking over are any good, and whether they will weaken our Chinese medicine industry, I don't want to say much here, except to state a fact, so follow me down the road.

For the Japanese acquisition of China's centuries-old traditional Chinese medicine enterprises this matter, has become a fact, multinational pharmaceutical companies on the Chinese medicine investment in frequent action in the end what is the reason?

Everyone first come with me to understand Tsumura Pharmaceuticals, according to the statistics of 2022, the Tokyo Stock Exchange in Japan listed on the 41 Japanese pharmaceutical companies (including non-main pharmaceutical company pharmaceutical business) annual sales rankings, Tsumura Pharmaceuticals with 129 billion yen ranked 20th. Tsumura Pharmaceuticals is a very small pharmaceutical company in the Japanese pharmaceutical companies, most Japanese people will never pay attention to the existence of Tsumura Pharmaceuticals in their lives, very, very marginal.

So why would a drug company so marginalized in Japan come to China to buy a Chinese medicine company? I think it's likely because more than 80 percent of Tsumura Pharmaceutical's products are Chinese herbal medicines, or what we call TCMs.

In Japan, in 2020, the sales of Chinese medicines amounted to 187.1 billion yen, accounting for less than 3% of Japan's drug sales market, an almost negligible market share. To put it bluntly, the size of the Japanese market for Chinese medicine is too small, Tsumura Pharmaceuticals so weak a drug company wants to rely on Japan to survive very difficult. (Personal opinion is for reference only)

As for the reasons for the acquisition of the Chinese pharmaceutical industry, according to the relevant analysis, it may be:

1, China's traditional Chinese medicine market demand is getting bigger and bigger, the Japanese companies through the acquisition of Chinese traditional Chinese medicine enterprises, can quickly enter this market, seize the high ground of the market.

2. Tap into the commercial value of Chinese medicine. Chinese medicine is an important cultural heritage, but its commercial value has not yet been fully tapped.

3, improve product quality. Competition in China's traditional Chinese medicine market is fierce, and in order to improve product quality and competitiveness, Japanese companies can gain technological and human resource advantages in China's traditional Chinese medicine industry by acquiring Chinese traditional Chinese medicine companies.

And in fact, Japan's Tsumura has long been laying out its business in China.

In recent years, Japan's Tsumura, through the business and capital transfer, has not only set up a cooperative herbal medicine base in China, but also established a herbal medicine processing plant and an extraction plant, acquired its raw material supplier, Shengshi Hyakuso Pharmaceuticals, and set up the headquarters of its Chinese operation organization, a joint venture with Ping An to set up a joint venture with Ping An Tsumura! The Chineseization development step is getting bigger and bigger!

According to the Enterprise 2022 Report, Nippon Tsumura's business revenue from the Chinese market will only account for 7.7% in 2021, but the company expects to account for 50% of the group's total revenue by 2031 through its plans to build a tripartite synergistic industrial chain of biopharmaceutical platforms, formulation platforms and research platforms in China.

After careful layout in these areas, Tsumura has started to sell delicate tablets in the medicinal and food categories on platforms such as Jingdong, and this time it has bought a century-old company, Shaanxi Ziguang Chenji Pharmaceutical Co.

But there is a practical problem, that is, usually some acquisitions happen at some important technology switching point, these key technologies are important for the future development of China's Chinese medicine industry. If the technology is transferred to Japanese companies, it will weaken China's technological advantage in Chinese medicine and pharmaceuticals to a greater extent, which is the real worrying thing at a later stage ......

So, as Chinese, we all need to pay more attention to the traditional Chinese medicine industry, and to protect and pass on the precious cultural wealth of traditional Chinese medicine. After all, Chinese medicine as a unique resource of China needs us *** with the same efforts in order to make it shine more brilliantly on the international stage.