Reckitt Benckiser, the British FMCG (Fast Moving Consumer Goods) giant is reportedly acquiring Anhui-based Golong Medicine, a traditional Chinese medicine manufacturer known for sore-throat remedies. The detailed costs of the acquisition haven’t been disclosed yet. Insiders believe that the acquisition will help Reckitt Benckiser to diversify its business and to sell western health products in China.

As for the future development of sore-throat remedy “Man Yan ShuNing”, Golong Medicine’s top product, which is only sold in China at present, it was reported by National Business Daily that the company would probably continue to market the product, but “it’s too early to sell traditional Chinese medicine outside of China,” said Rakesh Kapoor, CEO of Reckitt Benckiser.

Reckitt Benckiser representatives have told media that the company plans to expand its Chinese base through acquisition, joint-venture and factory construction, and to reach 10 billion yuan [US$1.6 billion] of sales in the Chinese market with the introduction of company’s 19 brands in over 600 cities by 2012.

Last year, Reckitt Benckiser settled in its North Asia headquarters in Beijing and invested 500 million yuan [US$80.2 million] to expand business in the Chinese market. In fact, a number of foreign companies are showing increased interest in traditional Chinese medicine. International food giant Nestle partnered with Hong Kong billionaire Li Ka-shing last November, building a joint venture focusing on traditional Chinese medicine remedies for gastrointestinal diseases.

“Foreign capital breaking into the Chinese market with acquisitions can help to decrease trial and error costs and local Chinese companies can also benefit from the capital injection and make an effect on brands to grow stronger,” said Feng Jianjun, a marketing expert in China.

Source: Morning Whistle Feb 2013

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