A spoonful of China makes the medicine go down
Just five years ago BJP Laboratories had a mere handful of staff and a modest facility. Today, Gold Coast-based BJP is one of Australia’s leading contract complementary medicine manufacturers for some of the country’s biggest pharmacy companies, including Blackmores and Swisse. It also manufactures its own rising star brand, Rochway, which specialises in probiotics. Now with two facilities, including a new state-of-the-art humidity-controlled laboratory, its ever-expanding team of 117 staff work in shifts around the clock to meet high demand.
Having conquered Australia, and established exporting channels to Europe, BJP has set its sights on exporting its Rochway brand to mainland China – a path lit by the China-Australia Free Trade Agreement (ChAFTA), which came into force in December 2015.
“We have a very big distributor in Hong Kong,” said Esti Siebert, Executive, BJP Laboratories. “It is quite a large contract, and we sell a number of our products there.”
As for mainland China, Ms Siebert said: “We are very much at the beginning of the journey. We got our first order in August 2015 for private-label products. The company in China is using our baby probiotics under their own name. We haven’t done anything with our own brand in China yet but hope to do so in the near future.”
ChAFTA outcomes include the elimination of 3 to 10 per cent tariffs on pharmaceutical products, vitamins and health products, either on entry into force or phased out by 1 January 2019. China was Australia’s largest market for pharmaceuticals in 2015, with exports worth $484 million. In Korea, pharmaceuticals face tariffs of up to 8 per cent. Most of these tariffs were eliminated on entry into force of the Korea-Australia Free Trade Agreement (KAFTA) in December 2014, and all will be gone by 1 January 2018.
Ms Siebert believes there is huge potential in the Chinese market. “We have found that China is attracted to products that are made in Australia and reputable brands. The medicine market is really growing too; baby probiotics in particular are popular,” she said. “China is definitely a huge market with enormous growth potential. That is why we’re targeting it at the moment. It would be absolutely wonderful if it could become an established market for us.”
As a result of ChAFTA and KAFTA, Ms Siebert said BJP has seen a change in the market. “Since the launch of ChAFTA and KAFTA, overnight, we’ve seen a really big increase in enquiries – many, many more. We’ve had a lot of prospective Chinese customers visiting us here looking at our products and Australian distributors wanting to take our products to China. The biggest interest is definitely in our baby and children’s probiotics. It’s exciting and we hope these will materialise into sales soon.”
But the biggest changes BJP has seen are in its contract manufacturing business. “We have seen about a 20 per cent increase in the amount of contract manufacturing work we do for clients exporting to China and Korea. We believe the FTAs have been a big influence in this and a major reason why our business has boomed,” Ms Siebert said.
BJP believes that where preparation meets opportunity comes success. “In just the last 18 months, we have tripled our staff from 40 to 117. And we have recently moved into our brand-new facility, which has the capacity to manufacture so much more. This means we can manage our increased contract business and potential growth in exporting our own product,” said Ms Siebert.
BJP’s mission to strengthen its Rochway brand and increase its exports to China is further fuelled by how the FTAs are making trade easier.
“From a logistical perspective, since ChAFTA was introduced we have found that freight going in and out is much easier,” said Ms Siebert. “In the past, when we’d send samples to China, it was always a major thing and we’d have issues. We would get items returned to Australia, which was costly, whereas now it really is so much easier.
“The FTAs are definitely opening up channels and I believe they will really open up the doors for business opportunity,” she added. “It’s amazing that the FTAs have happened – there will definitely be big cost savings for businesses. We look forward to seeing what comes of the upcoming exhibitions we are attending and progress over the next 18 months. I think a few of us should start learning to speak Mandarin too.”
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