Development Of APIs

- Aug 28, 2018 -

According to the domestic chemical drug market analysis report released by the survey agency, the economic operation of the chemical pharmaceutical industry in 2013 is not optimistic, but the growth is still worth looking forward to. Innovative enterprises will drive the transformation and upgrading of this industry. In addition, with the development of e-commerce in the chemical and pharmaceutical industry, the entry into the trading platform has become the only way for innovative companies. The development of traditional APIs is limited, and transformation and upgrading need to be done. As Shenzhen innovative enterprises enter the southern trading platform, more and more API suppliers have begun their own e-commerce road.


Domestic and international environment for the development of APIs

China is a major producer of APIs. In 2012, the output of APIs was 1.36 million tons, an increase of 9.05% year-on-year, and production ranked first in the world. The economies of scale benefited from the low cost and environmental pollution produced in China. In the current situation that China's prices generally rise and environmental management continues to strengthen, the cost advantage of industry development becomes less obvious.

Internationally, China's largest competitor, India, although its scale of development in the industry is not as good as China's, but it has obvious advantages over China in terms of cost advantages and industry development speed.


Problems in the development of China's APIs

First, due to the impact of the financial crisis, international buyers are tightly funded, purchasing power is declining or the purchase cycle is prolonged, which not only affects the sales volume of China's APIs, but also increases the operational risks of exporting companies.

Second, the skyrocketing price has aggravated the concerns and wait-and-see attitude of international buyers, which has affected the steady development of the drug market.

Third, the price increase of some APIs is relatively large, causing the impulse of enterprises to expand production capacity, which has aggravated the contradiction of oversupply in the market.

Fourth, the currency depreciation of major export destination countries and competitor countries has reduced the price competitiveness of Chinese APIs and increased the difficulty of exports.

Fifth, the financial crisis has intensified international trade protectionism and further worsened some of China's export market environment.


Prospects for the development of Chinese APIs

First, the global pharmaceutical market is expected to maintain an increase of more than 8% in 2014. The emerging pharmaceutical market is likely to maintain a larger growth rate, and the international and domestic market demand for APIs will continue to grow. [1]

Secondly, many of China's APIs have a high market share in the international market, and the scale advantage is obvious. Other countries cannot replace them in the short term.

Third, although the prices of Chinese APIs have risen sharply due to multiple factors, these rising factors are rigid. It is unlikely to fall sharply in 2013 and affect the total export volume of Chinese APIs. From the import situation of APIs in 2012, the average price has increased by 28.21%. Under the circumstances that the global price of APIs has generally increased, the comparative advantage of China's API prices still exists.

Fourth, Chinese enterprises will avoid the competition for homogenization, the development of special APIs, and the fact that many enterprises are targeting developed markets, actively adopting high-end market certification and continuously improving the quality of export products, and will expand the export space of Chinese APIs.

Fifth, the continuous encouragement and implementation of export policies by the state will also play an important role in promoting the export growth of APIs.