Citi Pharma forms JV with China’s Hangzhou Newsea to boost API production

KARACHI: Citi Pharma Limited has entered into a joint venture with China's Hangzhou Newsea Technology Co., Ltd to produce additional Active Pharmaceutical Ingredients (APIs), the company said in a statement to the Pakistan Stock Exchange (PSX) on Tuesday.

The JV, named as Etaci Limited (Public limited company) will focus on producing the remaining portion of Active Pharmaceutical Ingredients (APIs) that Citi Pharma Limited does not currently manufacture.

Currently, Citi Pharma manufactures around 20 to 22 APIs, catering to various medical needs. However, recognising the evolving landscape of healthcare and the increasing demand for diverse pharmaceutical products, the company has embarked on a mission to enhance its product portfolio.

Through the proposed joint venture with Hangzhou Newsea Technology Co., Ltd, Citi Pharma plans to manufacture an additional 30 APIs, effectively expanding its range of offerings.

The statement said that the decision to pursue this joint venture underscores City Pharma Limited’s proactive approach towards sustainable growth and transfer of technology to Pakistan.

Through this partnership, the company seeks to leverage the expertise and resources of its collaborator while capitalising on emerging opportunities in the pharmaceutical landscape.

Under the legal structure of Etaci Limited, City Pharma Limited retains a controlling interest of 65 percent, with Hangzhou Newsea Technology Co., Ltd holding the remaining 35 percent. By manufacturing a greater portion of APIs locally through Etaci Limited, City Pharma will decrease its reliance on imported products.

The joint venture is expected to generate an annual turnover of more than Rs15 billion. The projected cost of sale will be around Rs10.5 billion, resulting in a gross profit of Rs4.5 billion.

The statement said the joint venture is expected to benefit from Cit Pharma’s existing infrastructure and resources, minimising operating costs and streamlining production processes.

This will result in higher margins of net profits. By expanding its API manufacturing capabilities, the company aims to meet the evolving needs of the healthcare sector while contributing to the economic development of Pakistan as well.

“Moreover, this joint venture aligns seamlessly with our overarching vision for 2030,” it stated. “It is our steadfast ambition to cultivate self-reliance and contribute to the national economy by producing essential API materials within Pakistan. By reducing dependency on imports, we endeavour to bolster the resilience and autonomy of our pharmaceutical industry, thereby fostering a brighter future for our nation.”