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Bought by a Chinese sovereign fund, SGD Pharma will keep its plants in France

China Jianyin Investment's President Gu Jianguo has given an interview to AFP (Agence France Presse) a couple of days ago, generating an article on SGD Pharma in the French daily economic newspaper Le Figaro. Here are the key points.

China Jianyin Investment "never had any intention of relocating SGD Pharma's French plants to China" has confirmed Gu Jianguo, the fund's President. Talking about the future, Gu Jianguo stated that SGD Pharma should soon conquer the Chinese market as "the potential is huge" and the country is quite dependent from imports. This situation should be beneficial for SGD Pharma thanks to its Chinese plant located in Zhanjiang.

Gu Jianguo has been very reassuring on the future of the French plants: "We are not simply shareholders, we have a long term strategy. JIC never had any intention to relocate French plants to China. It is quite the opposite."

He added "one of those plants is 100 years-old and has a rich talent pool of people. The European production's facilities will be strengthened."​

JIC is a governmental entity specialized in assets and companies' management worth various billions dollars. C​reated in 2004, the fund owns or holds a share in 160 companies and institutions in various sectors: finance, media, agro alimentary, real estate…SGD Pharma is the first investment in the pharmaceutical sector and Gu Jianguo chose this French company for its large number of patents and for the profitability "very resistant to macro-economic fluctuations" of the sector.

JIC wishes to leverage SGD's Chinese plant to take advantage of the Asian markets still untapped. The Chinese plant, producing 1.8 million bottles per day, is very 'profitable' adds JIC's President.

With a 30% market share of the global market, SGD has little presence in Asia including China while in this country, the pharmaceutical market should register a strong growth. Between the middle class's boom, the population's ageing, increasing health plans and concerns by the Chinese people, drug expenses should increase from 108 billion dollars in 2015 to 167 in 2020.