Two new production bases of Beijing Tongrentang, a leading producer of traditional Chinese medicines (TCM), are to officially start operations at the end of this year.

"The completion of the new production bases is a key step in Tongrentang's further development and for the modernization of the TCM industry," said Mei Qun, general manager of Beijing Tongrentang Group.

The bases, to be located in Yizhuang, Beijing Economic Development Area, will accommodate eight large-scale TCM production lines and involve a total investment of nearly 600 million yuan (US$72.5 million).

"Streamlined production will greatly increase output and meet the huge market demand," Mei said.

Tongrentang's products are popular among Chinese consumers. According to the company's statistics, on average, the supplies of some 30 kinds of products run out everyday.

One production base, owned by Tongrentang's Shanghai-listed subsidiary Tongrentang Shareholding Co, has a designed annual capacity of 1.5 million kilograms of pill medicines, 200 million capsules, 600 million drop pellets, and 400,000 kilograms of granules.

The other, invested in by Hong Kong-listed Tongrentang Technologies Co, can produce 3 billion tablets, 4 million kilograms granules and 3 million kilograms pills a year.

Industry insiders said that Tongrentang's new production bases mean the company has shifted focus from traditional manufacture to modernized large-scale production.

In addition to its production expansion in Beijing, Tongrentang also plans to set up a TCM manufacturing base outside the Chinese mainland, to serve its overseas business.

Beijing Tongrentang Guoyao Co Ltd announced late last month that it would invest HK$150 million (US$19 million) in setting up a plant in Hong Kong.

"Using the region's geographic and transportation advantages, we can better develop products for overseas markets," Mei said.

He said he expected that the Hong Kong production base's annual output could reach 500 million yuan (US$60.4 million) in 2005 and top 1 billion yuan (US$120 million) in three years.

Tongrentang, which celebrated its 335th anniversary this year, has set an ambitious goal of achieving a total sales of 30 billion yuan (US$4.8 billion) and net profit of 1.3 billion yuan (US$157 million) by the year 2011.

(China Daily November 18, 2004)