Shanghai Pharma will partner with DHL Supply Chain to enhance quality control measures, streamline distribution processes, and strengthen compliance with local and international food and pharmaceutical regulations.
Shanghai Pharma, one of China’s largest listed pharmaceuticals groups, has signed a memorandum of understanding (MoU) with DHL Supply Chain to prepare its logistics infrastructure for rapid global expansion.
The pharmaceuticals giant, which generated revenues of more than U$18 billion (RMB121 billion) last year – will partner with DHL Supply Chain on quality, efficiency, compliance and regulations.
A range of recent government initiatives, including the ‘two-invoice’ or fapiao policy which was rolled out earlier this year, have put greater onus on China’s pharmaceutical sector to improve the transparency and efficiency of local supply chains.
Shanghai Pharma president and executive director, Cho Man says: “The quality and resilience of our logistics infrastructure will determine not only how successfully we adapt to new legislation like fapiao – which seeks to cut down on multiple distributors and mark-ups by only allowing two invoices per goods shipment, but also our ability to capitalise on the huge international growth opportunity for high-grade Chinese pharmaceutical products and medical devices.
“China’s national market for drugs has grown rapidly in recent years to become the world’s second-largest with an estimated growth to around $167 billion by 2020. Our partnership with DHL will help Shanghai Pharma to become one of the world’s foremost pharmaceutical manufacturers – supported by a global distribution network that combines world-class quality control with fast, seamless delivery.”
The MOU will grant Shanghai Pharma priority access to DHL’s global logistics network including temperature-sensitive life sciences services to Europe. DHL Supply Chain will also support Shanghai Pharma’s supply chain optimisation needs as the manufacturer ramps up its overseas distribution and retailing efforts.
DHL Supply Chain CEO for Greater China, Yin Zou explains: “China’s pharmaceutical industry has historically suffered from high levels of fragmentation amongst its local customers and distributors, an issue which recent legislative changes like the ‘two-invoice’ policy have sought to combat.
“In this regulatory climate, end-to-end supply chain management plays an increasingly crucial role in determining how effectively Chinese pharmaceuticals firms not only maintain sales locally, but gain traction abroad in a cost-effective and sustainable manner.”
He adds: “We believe that our partnership will not only greatly benefit both parties, but raise the bar for quality control and supply chain efficiency across China’s entire pharmaceutical industry.”