Founder Invests in Shenyang

Founder Invests in Shenyang. Check it out:
(SinoCast China IT Week Via Thomson Dialog NewsEdge) SHENYANG, September 28, SinoCast -- Founder Group, one of the leading PC makers in China, recently signed a memo with relevant departments of Shenyang City, according to which it will obtain a 44.56% stake in Northeast Pharmaceutical Group from the State-owned Assets Supervision and Administration Commission of Shenyang People's Government.



Since Northeast Pharmaceutical Group holds a 47.51% stake in Northeast Pharmaceutical Group Co., Ltd. (SZSE: 000597), Founder will become the controlling shareholder of the later after the conclusion of the deal.

Founder will follow the mode of "BlueStar" in restructuring Northeast Pharmaceutical Group, remarked an official from Shenyang People's Government. This means that Shenyang People's Government transfers the stake to Founder free of charge, and in return, Founder will make investments in Northeast Pharmaceutical Group Co. Ltd. and build an 8-inch-above chip plant there.

In April 2004, China National BlueStar (Group) Corporation struck an agreement with Shenyang People's Government concerning the acquisition of Shenyang Chemical Industry Group (SCIG)'s state-owned assets and stake.

Since the beginning of 2005, BlueStar and SCIG have carried out cooperation in an all-round way, establishing three significant projects with a total investment of CNY 10 billion in Shenyang City. It is estimated that the three projects will bring in production value of around CNY 20 billion by 2010 for Shenyang City, according to a manager of SCIG.

Perhaps being aware of the benefit, Shenyang decided to continue to adopt the mode in the transfer of the stake in Northeast Pharmaceutical Group.

"Shenyang People's Government had the plan to introduce strategic investors rather long ago. Since the R&D investment in the pharmaceutical industry is huge, Northeast Pharmaceutical Group can not sustain the continuous development Northeast Pharmaceutical Group Co., Ltd.," a source disclosed, "Previously, several companies in South China, especially in Shenzhen, had expected to become the controlling shareholder of Northeast Pharmaceutical Group. However, because of the requirements of Shenyang, they eventually gave up the plan." Founder, strong in capital, can increase the investment in R&D after taking a majority stake in Northeast Pharmaceutical Group, according to Liu Guohong, an analyst with V-sun Securities. Founder possesses the huge marketing system, which is its most valuable asset. Although the marketing system is mainly for IT products, Founder still can integrate client resources within the system.

Northeast Pharmaceutical Group Co., Ltd., the largest bulk drug production base in China, boasts the biggest sodium fosfomycin and VC production capacity. It is the first enterprise in the country producing anticancer drug Zidovudine, and its products Amanta die and remantadine are recommended as the drugs for curing bird flu by the country's Ministry of Health.

"More importantly, Founder is a state-owned enterprise as well, and this is the major factor for Shenyang's transfer of the stake to it," said an insider, "Furthermore, Founder offers more preferential conditions." In 2003, Founder made an investment of CNY 300 million into Southwest Synthetic Pharmaceutical Corp. Ltd., thus becoming the controlling shareholder of the latter and indirectly holding a majority stake in Southwest Synthetic Pharmaceutical Co., Ltd.

(SZSE: 000788).

"Southwest Synthetic Pharmaceutical Corp. Ltd. and Northeast Pharmaceutical Group are related and complementary to each other in product property, which lays a solid foundation for Founder in the future integration," said Liu Guohong.

Not long ago, Jiang Bijin, vice president of Founder, once said that Founder discovered two new profit breakthroughs, namely multi-layer circuit water and chip.

One of the conditions for Founder procuring the controlling stake in Northeast Pharmaceutical Group is the establishment of an 8-inch-above chip project in Shenyang City.

(USD 1 = CNY 7.94)

Copyright 2006 Sinocast
The opinions and views expressed in comments, blogs, etc. are those of the authors alone and not necessarily those of TMC, TMCnet, or its editors. TMCnet reserves the right to edit, delete, or otherwise make changes to the content that appears on these pages at its own discretion and as it deems necessary.

Listed below are links to sites that reference Founder Invests in Shenyang:

Around TMCnet Blogs

Latest Whitepapers

TMCnet Videos