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In pandemic lesson, German drug maker Stada banks on China for raw materials, supply chain security

  • Stada seeking partnerships in mainland to bolster raw material supplies, sales in Asia’s biggest pharmaceutical market
  • Move in Asia follows recent aggressive acquisitions of assets in Russia, Ukraine markets

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An employee checks the production of capsules at a Stada Arzneimittel durg manufacturing facility in Germany. Photo: dpa
Eric Ng
Stada Arzneimittel, a German drug maker owned by private equity firms Bain Capital and Cinven, is turning to China to strengthen its global supply security while enhancing its presence in Asia’s biggest pharmaceutical market.
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The company is seeking partnerships to source more raw materials from the mainland as an insurance, an official said. Disruptions caused by the coronavirus pandemic since January have raised awareness among global drug manufacturers on the importance of health care supply security.

“China is a vital part of our global supply chain for raw materials and finished products,” Gary Clark, managing director of its Asia-Pacific operations, said in an interview. “We have many API suppliers in China. We are looking to increase API sourcing [there].”

China currently supplies around a fifth of the raw materials and finished products that Stada purchases from the Asia-Pacific region. Around 40 active pharmaceutical ingredients (APIs) are exported from China to the group’s key manufacturing facilities in Germany and Serbia, Clark added.

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China’s pharmaceutical sector sales rose by a compound annual rate of 8.1 per cent between 2014 and 2018 into a market size of 1.53 trillion yuan (US$215.4 billion), according to market researcher Frost & Sullivan.

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