Traditional medicines take on Western competitors

The Yunnan Baiyao Group Co, manufacturer of the wonder drug has recently embarked on an ambitious program, aimed at diversifying its product range. This has seen the company explore a number of new applications for its core product, including traditional Chinese medicines, flexible fabric bandages, toothpastes, shower gel and buccal tablets.

Explaining this new initiative, Wang Minghui, chairman of the Board of Yunnan Baiyao Group, said: "We aim to revitalize this 100-year-old Chinese traditional herbal medicine and develop it into a variety of related affiliated products and boost its market value."

Adding more products, such as adhesive bandages and toothpaste, to its range has proved to be a great success for the company, the country's largest over-the-counter injury treatment business.

Over the last 10 years, the company's management has sought to capitalize on the popularity of baiyao in a bid to modernize its product mix, in response to changes in the Chinese pharmaceutical industry and increased competition at a global level.

The Kunming-based company's first expansion of its product portfolio proved a huge success. Its entry into the domestic bandage market, dominated by Johnson & Johnson since the American pharmaceutical giant launched in China in 1992, proved a huge success.
Despite the difficulty the company faces from the troubled financial markets, especially the pressure from declining exports, Wang remains confident that the firm will record 10 billion yuan of revenue by 2011.

Based on its current resources, the Yunnan Baiyao Group will relocate and build a completely new natural pharmaceutical base, offering integrated medicine manufacturing, processing and distribution, covering a total area 1,027 mu. The total project investment involves some one billion yuan.

At present, the company has had six products with more than 100 million yuan annual sales volumes each, including Yunnan Baiyao woundplast, Yunnan Baiyao Aerosol, Yunnan Baiyao Toothpaste, Yunnan Baiyao Hemorrhoids Ointment and the Yunnan Baiyao first-aid kit.