The Straits Times / The Business Times News on AsiaPharm

Natural remedies company seeks $30 million in IPO

By Rachel Lin - Apr 27, 2004
The Straits Times

TREATING rheumatic pains does not have to involve vial after vial of potent chemicals. Rather, relief from aching joints could come from your kitchen table: in the form of the humble chilli.

That, after all, is what China-based pharmaceuticals company AsiaPharm is developing into drugs. AsiaPharm, which registered a turnover of 238.1 million yuan (S$49.3 million) last year, says it is one of the leading companies on the mainland which formulate and patent 'natural' drugs - those derived from plant and animal sources.

The company, which is seeking a listing here, will launch its initial public offer (IPO) tomorrow. It hopes to raise $30 million, which will be used to step up research and development (R&D) efforts, strengthen its distribution network, buy new equipment and repay bank debts.

'The procedure for listing in Singapore takes only one year, which is faster than in China. It's also more transparent and systematic,' executive chairman Liu Dianbo said.

While it may seem odd to rub chilli on sore limbs, Mr Liu maintains that these natural drugs will only rise in popularity as people increasingly recognised the side effects produced by chemical drugs.

'Ordinary chemical drugs are also costly and time-consuming to develop,' he said in an interview yesterday, adding that annual sales of natural drugs were likely to increase 10 per cent over the next two years.

Last year, AsiaPharm posted a net profit of 44.8 million yuan - a sum 3.7 times its earnings in 2002, thanks to greater revenue, lower costs and tax rebates.

It has 35 sales support offices and 250 distributors throughout China, and claims to have a stable client base of 1,300 hospitals. Three months ago, the company set up a representative office here and is set to use Singapore as a springboard into the region by cooperating with local R&D facilities and multinational corporations.

'We can also collaborate with local organisations and European, American or Japanese companies by both taking our products overseas and letting them use us as a platform into China,' Mr Liu said.