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Volume 85 Issue 21 | pp. 15-21
Issue Date: May 21, 2007

Cover Stories: The Indian Advantage

Chinese Fine Chemicals Makers Discover How To Sell In India

Department: Business
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Making Friends:
Xiulang Zhang, vice-president at Anhui Biochem Pharm, greets potential customers.
Credit: Jean-François Tremblay/C&EN
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Making Friends:
Xiulang Zhang, vice-president at Anhui Biochem Pharm, greets potential customers.
Credit: Jean-François Tremblay/C&EN

While major pharmaceutical firms are learning how to conduct drug discovery research in India, small Chinese producers of fine chemicals are aggressively finding out about market opportunities in the country. At the ChemSpec India trade fair held last month in Mumbai, companies from China made up about one-third of the exhibitors.

With their low prices, Chinese manufacturers of pharmaceutical intermediates can potentially boost the competitiveness of Indian drug companies. But this cooperation is at an early stage of development.

"India is still not a big market for us, but it has a lot of potential," said Shaohai Wang, president of Beijing Tianlihai Chemical, a manufacturer of maltol and ethylmaltol. "Many potential customers do not know our company yet in this country," he commented. Wang said he visited India for the first time last month.

So far, many Chinese companies seem to have only a vague idea about how to go about selling in India. Isabel Dong, a project manager for China Council for the Promotion of International Trade, said many Chinese firms selling fine chemicals in India still do not have an agent in the country, let alone their own sales office.

Xiulang Zhang, a vice president at Anhui Biochem Pharm, a producer of chiral compounds and AIDS treatments, said Chinese companies do not understand the international pharmaceutical market as well as Indian companies do. "This can put us at a disadvantage, especially when we negotiate prices," she said. Zhang said she is determined to make headway in India and will continue to visit the country at least twice a year.

Chinese executives who talked to C&EN expressed surprise at the aggressiveness of Indian buyers during price negotiations. Indians are relentless in their efforts to obtain lower prices, even more so than buyers in China, they said. "What really gets to me is when the potential Indian buyer gets my best price after a heated discussion and then just walks away without ordering anything," said Encheng Guo, a sales manager at biocide producer Boya Fine Chemical. "I know that they'll just use that price to negotiate with someone else."

At Nanjing Odyssey Chemical, Chairman Yaofang Pan said he's not sure whether Indian buyers use his company's dye intermediates and organic fine chemicals in their plants in India or if they export them to other countries. But he believes he knows the most important thing about the Indian market. "In Europe, customers care about quality and reliability," he said. "But here, it's the price that matters."

 
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