Shandong Pharmaceutical Glass continues to grow in the pharmaceutical glass bottle market

The strong demand in overseas markets has enabled Shandong Pharmaceutical to maintain its continuous growth, but the growth rate has begun to slow. Mastering Class I water-resistance pharmaceutical glass technology will help the company achieve long-term excess returns, but Class I water-resistant pharmaceutical glass is still in the product introduction period, and the appearance of technology advantages will take a long period of time.

The company is the largest manufacturer of medical glass in China. The leading product molding bottle has a scale advantage in quality and price, and its domestic market share is over 70%. Through technological innovation, the company has formed six series of molded bottles, ampoules, vials, infusion bottles, glass tubes and brown bottles. Since 2007, the company has adjusted its product structure according to market demand and increased the production and sales of brown bottles, which is the main reason for the increase in operating revenue. Due to the strong demand from abroad, in the brown bottle, in the two new production lines, the increased production capacity exceeded 600 million/year. In order to counter the negative impact of rising raw material prices, appreciation of the renminbi, and reduction of the tax rebate rate, the company plans to increase the ex-factory price of some products.

As the main business products pharmaceutical packaging materials industry boom is good, the company will strengthen the development of foreign markets while strengthening the domestic market, increase exports to increase economic efficiency. The company will also build high-end, light-weight, thin-walled brown medical glass bottles and new biological packaging materials projects. In 2008, it plans to produce 9.8 billion molded bottles, 1.2 billion brown bottles, and 4.6 billion butyl rubber plugs.

Due to the increase in raw material prices and the drop in export tax rebate rate, the gross profit margin of products has declined, and the fierce market competition has also led to a decrease in the price of butyl rubber stoppers, which has affected the overall profitability of the company. However, the company’s products have cost advantages, combined with medical applications. Bottles are necessities of life that are less affected by the economy , leaving the company’s overseas markets unaffected, thus maintaining sustained growth in performance, but net profit growth slowed compared to the first half and was below revenue growth.

As the first company in China to master Class I water-resistant medical glass technology, due to its high level of technology and limited competition, it will help the company to achieve long-term excess returns, but Grade I water-resistant medical glass is still in the country. During the introduction period, the emergence of technological advantages still takes a long period of time. Compared to the company's original traditional molding bottle business, a production line needs to invest 20 million yuan, and annual production of 900 million molded bottles, only to achieve sales income of 36 million yuan; and a level I molded bottle production line only need to invest 15 million, Each year, 120 million I-grade molded bottles can be produced, which can achieve a sales income of at least 100 million yuan. At the end of 2008, a new production line of the company will reach production. It is expected that the company's annual operating income will increase by 300 million yuan and the gross profit margin will be 60%, which will become the driving force for future growth.

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