Australian pharmaceutical company Blackmores will attempt to tap into the burgeoning herbal medicine market in China and throughout Asia via its new Australian-based business.
The vitamin maker on Friday announced it had acquired leading local Chinese medicine manufacturer and distributor Global Therapeutics, a group that currently commands an estimated 80 percent share of the Chinese herbal remedy market in Australia, for 17 million U.S. dollars.
Global Therapeutics, based out of the coastal city of Byron Bay, has two main brands Fusion and Oriental Botanicals which are currently only sold in Australia.
But with the Chinese natural-remedy market said to be worth 125 million U.S. dollars worldwide per annum, Blackmores' chief executive Christine Holgate said the group would look to push into the world's most populous country, China.
"It's not going to happen overnight but there is a fantastic opportunity," Holgate told Fairfax Media on Friday.
"It will enable us to better understand the Chinese consumer and get closer to them."
Last year, the Federal government removed its pre-existing 4-6 percent tariff on Australian pharmaceutical exports, such as vitamins, to China by signing the Chinese-Australian Free Trade Agreement (ChAFTA).
By 2019, 95 percent of Australian healthcare exports must be tariff-free to satisfy the terms of the historic document.
In the past 12 months alone, Global Therapeutics' domestic sales have increased by 24 percent, Holgate said.
Holgate said Australia currently has more than 4,700 registered Chinese medicine practitioners, and the market showed no signs of slowing down.
Despite Blackmores' success on the Australian Stock Exchange, largely stemming from the massive demand in China for its "clean and green" vitamin products, Holman said there was still room for improving its range.
Holgate said Blackmores' upper management had identified natural remedies as one of the company's biggest weaknesses.
"It's the natural medicine part we've not been strong in," she said on Friday.
Asian buyers now make up around 50 percent of Blackmores' total sales, a figure that could likely expand through exporting Fusion and Oriental Botanicals.
Blackmores has no plans to rebrand the Fusion and Oriental Botanicals for the Chinese market, Holgate said.