Environmental governance continues to increase the elimination of API companies, but vitamin companies have won a share in the elimination competition. Ten ministries and commissions including the Ministry of Environmental Protection and the Development and Reform Commission, in conjunction with 6 provinces (cities) including Beijing, Tianjin, and Hebei, once again issued relevant plans to emphasize the supervision of API companies, and API companies face the risk of production suspension. A reporter from the Beijing Business Daily found that the suspension and restriction of production of raw material pharmaceutical companies have brought up the price of some raw materials. Among them, the performance of vitamin companies is particularly obvious. Benefiting from the increase in vitamin prices, the performance of companies such as Northeast Pharmaceutical has increased.

Environmental protection plus

The production of APIs often brings serious environmental pollution. In the early stage of winter heating, various ministries and commissions issued air pollution control plans to increase environmental control. Recently, ten ministries and commissions including the Ministry of Environmental Protection and the National Development and Reform Commission jointly issued the "Beijing-Tianjin-Hebei and Surrounding Areas 2017-2018 Autumn and Winter Air Pollution Comprehensive Control Action Plan" (hereinafter referred to as the "Plan") in conjunction with 6 provinces (cities) including Beijing, Tianjin and Hebei. Environmental governance.

In contrast, this year’s environmental protection efforts have been significantly improved. The scope of air pollution control has been expanded from last year’s three provinces and cities to Beijing, Tianjin, Hebei, Shanxi, Shandong, and Henan. The control efforts have been increased. The "Plan" clearly mentions the pharmaceutical industry and stipulates that by the end of October 2017, all localities will basically complete the rectification work, and the unfinished enterprises will suspend production and rectification in accordance with the law; before the end of December 2017, complete the issuance of pollutant discharge permits for the manufacturing of raw materials and other industries. Those who do not discharge pollutants in accordance with the license shall suspend production according to law for rectification and be fined.

Environmental air pollution control, API companies are the primary targets of supervision. In 2016, the Environmental Protection Tax Law was promulgated, changing environmental protection fees to environmental taxes, and heavy taxes will be imposed on high-polluting industries such as raw materials. In the "Thirteenth Five-Year Plan for Ecological Environmental Protection" issued at the end of 2016, the API manufacturing industry is required to promote the transformation of the industry to meet the emission standards.

Environmental protection has indeed affected API companies. In November 2016, North China Pharmaceutical issued an announcement stating that, in accordance with the "Shijiazhuang City Sharp Sword Decontamination Action Implementation Plan" and the requirements of the municipal government, the company and Shijiazhuang Neizi (Branch) Company will stop production, and the raw material medicine part will affect the current profit of about 50 million yuan. At the same time, CSPC, Shenwei Pharmaceutical and Shisiyao Group all stated that they have received notice from the Shijiazhuang Municipal Government and ceased production.

elimination acceleration

Under the increasingly stringent pressure of environmental protection policies, the knockout competition of domestic API companies is accelerating. Pollution control costs have gradually increased, and some small and medium-sized pharmaceutical companies have insufficient investment in environmental protection, resulting in non-compliance and restricted production or suspension of production. Among them, small and medium-sized enterprises that are unable to upgrade environmental protection equipment will be eliminated first.

Public information shows that Taizhou, Zhejiang is an area where API companies are concentrated. Before 2001, there were more than 2,000 pharmaceutical companies that mainly produced APIs and intermediates. After the environmental protection efforts were strengthened, nearly 1,000 pharmaceutical and chemical factories were closed in this area. There are more than a hundred homes left.

Faced with increasingly strict environmental protection requirements, companies that are backward, low-level repeated construction, and over-standard polluting at the expense of the environment will be difficult to survive. The high pollution control costs of pharmaceutical companies, even as high as 100 million yuan, have prompted some API companies to consider transformation. Data show that around 2011, North China Pharmaceuticals started a strategic transformation of "innovation-driven development, realizing the transformation from raw materials to preparations". After the transformation began, North China Pharmaceuticals focused on the development of four major areas of "anti-infection, anti-tumor, cardiovascular and cerebrovascular and immune regulation". At the beginning of CSPC's listing, the company's main business was the raw materials of penicillin series, cephalosporin series and vitamin C series. Today, innovative drugs have become the engine of CSPC's performance growth.

The price soared

Environmental protection inspections have become stricter, and some API companies have been suspended or restricted, pushing up the prices of APIs. Rising product prices directly affect corporate performance. Benefiting from the increase in vitamin prices, Northeast Pharmaceutical achieved a net profit of 39.694 million yuan in the first half of 2017, a year-on-year increase of 1162.03%. Northeast Pharmaceutical said that the company's leading product vitamin C prices rose, while long-term order sales decreased compared with the first quarter.

Garden Biology said that benefiting from the company's first fundraising project products-cholesterol and 25-hydroxyvitamin D3, the original production and sales volume increased significantly, the company achieved a net profit of 75,188,900 yuan in the first half of this year, an increase of 378.01% year-on-year. Relevant data show that since June this year, the price of vitamin D3 has risen from 70 yuan/kg to 425 yuan/kg in July. The increase has been as high as 456% since 2017, and the price has reached a record high. At present, many companies have stopped taking vitamin D3. Offer.

In view of the impact of the current vitamin price trend on the company, the continuous increase in environmental protection efforts, the company’s problems and corresponding countermeasures, and whether the company’s performance increase due to the suspension of production, production restrictions and other reasons can continue to increase the company’s performance, the future development of raw materials and vitamin products A reporter from Beijing Commercial Daily called and emailed the Secretary of the Board of Directors Office of Northeast Pharmaceutical and Garden Biology, but did not receive any response as of press time.

The analysis believes that strict control of environmental protection inspections will become the norm in the second half of 2017. At present, the domestic market has strong price support and there is a certain room for increase. Most vitamin varieties will continue the trend in the first half of the year to increase prices or deposit prices. Vitamin companies are expected to increase prices in 2017. Results may be further improved.

According to the data of CMH in the first half of 2017, vitamin drugs including B vitamins, vitamin A, vitamin AD, vitamin C, vitamin D, vitamin E, vitamin K, multivitamins, vitamins and mineral compounds, 2016 In the year, the sales scale in the five major terminals reached 19.3 billion yuan, an increase of 8.43% year-on-year.

Beijing Commercial Daily reporter Liu Yu Guo Xiujuan/Text CFP/Picture