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Terumo Announces Business Expansion in China and Its Holding Company Application

09/06/2011 - Tokyo, Japan

Terumo Corporation (TOKYO:4543) has been expanding its operations in China mainly based on the interventional business within the cardiovascular field. Currently, due to the speedy healthcare infrastructure improvement, Chinese market is expanding from cities throughout the country. Within such a market, Terumo will enhance local development and production capability as well as strengthening its sales. In addition to interventional business, Terumo will expand businesses in the fields of infusion therapy and blood transfusion. 

1. Full entry into the infusion therapy business

As the first step, Terumo concluded an ODM (Original Design Manufacturing) supply and development agreement of infusion pumps with Beijing KellyMed Co., Ltd. (Head Office: Beijing), a leading local manufacturer of pumps and starts sales in July, especially for the Grade II hospital market that has been expanding dramatically. Furthermore, Terumo will form partnership with Shenzhen Baoan Medical Supply Co., Ltd. (Head Office: Shenzhen) and Dragon Heart Medical Devices Co., Ltd. (Head Office: Guangdong) to market infusion sets for pump.

Terumo also plans to conclude an ODM agreement for IV catheters with a local manufacturer and will start to distribute its products from this summer. Currently, in order to increase sales in the fast-growing IV catheter market, Terumo is concurrently developing in-house IV catheters with safety functions to prevent accidental needle sticks, in China, in addition to aforementioned ODM project, and planning to launch it in 2012.

2. Establishment of blood management business model

In the blood transfusion field, through partnership with an established manufacturer of leukocyte reduction filters used for bedside transfusion practice, Nanjing Shuangwei Biotechnology Co., Ltd. (Head Office: Nanjing), Terumo began distributing blood bags with filters. In China, blood products, especially plasma and platelet components, are always in a shortage. With its comprehensive lineup of products from blood bags to blood component collection systems, Terumo is responding to increase in demand for transfusions and is establishing blood management business model.

3. Establishment of holding company and additional sales offices in China

Terumo has been expanding its business within the Chinese market at the average rate of 30% annually. It is anticipated that the Chinese medical device market will grow annually by 15% over the next decade. In order to further strengthen local development, manufacturing, and sales in the fast-growing Chinese market, Terumo has applied for the establishment of "TERUMO (CHINA) HOLDINGS CO., LTD." as a holding company. Terumo will promptly consolidate a business model in China, and increase sales rate of China-made products from current 5% up to approximately 50% by FY2015. In relation to sales offices, Terumo will newly open five sales offices in Nanjing, Xian, Jinan, Shenzhen, and Changchung in addition to the existing eight sales offices. Terumo shall further accelerate business expansion and target achieving sales of more than 20 billion yen (*1) in FY2013, twice as much as that at this point in time.

 

(*1) 1US$=80 JPY

(Notice) Among the information that Terumo discloses, forecasts of financial performance on future projections contain potential risks and uncertainty since these are forecasts on projections made by Terumo based on limited information available at the moment of disclosure. Accordingly, it should be noted that actual results may differ from those forecasts on projections due to various factors. Factors affecting actual results include, but are not limited to, changes in economic conditions surrounding Terumo, fluctuations of foreign exchange rates, and state of competition.