VANCOUVER, Oct. 3 /PRNewswire-FirstCall/ - Dragon Pharmaceutical Inc. (TSX: DDD; OTCBB: DRUG; BBSE: DRP) today announces major increase in both prices and sales volumes for its main products. Further, under favorable market conditions, the Company has been operating near its maximum capacity to meet rising customer demand.
During the first eight months ended August 31, 2007, the Company has achieved significant increase in both price and sales volume for its main product 7ACA. The market price for 7ACA in China, including value added tax, has risen 27%, from 750 RMB/kg in January 2007 to 950 RMB/kg in August 2007, representing a record high price for the past two years. Total sales quantity of 7ACA reached 360 tons, an increase of 38% compared with 261 tons of sales for the same period of 2006.
The prime reason for the increase is because the rising demand for 7ACA has exceeded supplies. On one hand, the Chinese Government's effort to expand its National Medical Coverage in the rural area has triggered a strong demand for the basic antibiotic drugs; on the other hand, export from China continues to increase as other international 7ACA manufacturers outside of China continue to curtail their production levels. China is noted for its low cost and large-scale production of active pharmaceutical ingredients (APIs), and has fast emerged as a powerful player in the global API market with an average growth rate exceeding 25%. Meanwhile, since the prices of Penicillin intermediates still remain high, many customers have purchased cephalosporins as alternatives, which has further pushed up the demand for 7ACA products. During the first eight months of 2007, Dragon has maintained a utilization rate of over 90% for its production facility, compared to approximately 67% for the same period in 2006, in order to keep up with the demand from its existing and new customers.
Another factor affecting the price of 7ACA is the increased cost of raw
|SOURCE Dragon Pharmaceutical Inc.|
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