Yabang Group Grew on Clusters   

   Yabang Chemical Group Co., Ltd. (Yabang Group) was founded in eastern China's Jiangsu province in 1993.    
   After 20 years of development, Yabang Group has developed from a small township enterprise into a large-scale group with an annual sales revenue of over RMB10 billion. At present, this company has more than 40 subsidiaries that engage in dyes, paints, pigments, pharmaceuticals, pesticides, veterinary drugs, housing and modern logistics. In the past five years, the company's annual sales revenue has averagely grown by 40%/year, and its earning before tax has grown by 35% annually. In 2009, its total sales revenue reached RMB12 billion.   
   At present, Yabang Group has achieved an annual output of 50 000 tons of anthraquinone disperse dyes and intermediates, 200 000 tons of unsaturated polyester resin, 80 000 tons of maleic anhydride and 1 000 tons of active pharmaceuticals ingredients (APIs) and pharmaceutical intermediates. The group can produce more than 200 varieties of pharmaceuticals.

Creating a new model for pharmaceutical logistics   

In 2005, based on its mature business model, Yabang Group cast its eyes upon the pharmaceutical distribution business and decided to invest RMB800 million to build a pharmaceutical logistics base. At that time, China had a large number of pharmaceutical wholesale/distribution firms, but the market was in disorder and diversified. Most of the firms had a small size and competed in similar product portfolio each other. Their profitability and management efficiency were very low. Although the Chinese government had opened the pharmaceutical wholesale/distribution market to private firms, there were few successful cases in China back then. With careful studies, Yabang Group found that the logistics cost of the average Chinese pharmaceutical wholesale/distribution companies accounted for more than 10% of its sales revenue, but this index was only 2.6% in the US, and their net profit margin were also much less than half of that of the US. So Yabang Group decided to enter this field.
   With a clear target, Yabang Group, jointly with and other two companies formed a joint venture - Jiangsu Yabang Pharmaceutical Logistics Co., Ltd. to operate the logistic base project. Construction of the project was officially started in 2006. As of July this year, the joint venture has invested reached RMB1.6 billion in the base that covers an area of 53.3 hectares and is capable of meeting the massive logistical need of pharmaceutical manufacture companies and wholesale/distribution firms in southern Jiangsu province.
   Yabang Group estimated that this logistics base can help pharmaceutical manufacturers save logistics and distribution costs by 40% and reduce their drug inventories by one third. The JV can provide logistics, procurement and professional delivery services for hospitals and pharmacies to shorten the delivery time and prevent pharmaceuticals from being damaged. Such services can indirectly reduce the retail prices of drugs by 20% in the region where the base is located. As of the end of 2007, the base was home to more than 100 logistics companies and 91 special-line logistics service companies, which together serving more than 1 000 pharmaceutical manufacturers. Its total logistics revenue reached RMB5.8 billion in 2007. At present, the pharmaceutical logistics base is still developing rapidly. It introduced a new model for the professional cluster services of pharmaceutical logistics in China. Yabang Group believes that this model has a very broad prospect of development. It is expected that in 2012, its logistics revenue will exceed RMB15 billion.

Building industrial parks

Yabang Group has been building Yabang Industrial Park in Guannan county, Lianyungang, northern Jiangsu province cooperated with the county government since 2003. In the past seven years, Yabang Group has set up six subsidiaries in this industrial park with an investment of RMB400 million. In 2009, Yabang Group's six subsidiaries there together achieved sale revenue of RMB500 million. Recently, Yabang Group says that it will invest RMB10 billion to build a Yabang industrial hub in the Liangyungang Chemical Industry Park, also in Guannan county. In the hub, Yabang Group will focus on developing low carbon, environmentally friendly and energy conservation salt chemical projects. In the next five years, the hub is planned to bring a sales revenue of RMB30 billion to the group. Yabang Group will use its 20 patented technologies and other advanced technologies and make full use of abundant salt resources in coastal areas to build a salt chemical product chain in the hub, including a 300 000 t/a caustic soda unit, a 150 000 t/a benzene chlorides unit, a 300 000 t/a sulfur-to-sulfuric acid unit, a 100 000 t/a phthalic anhydride unit as well as high-grade dyes, pigments and phosgene-based pesticide projects.
   Currently, one of Yabang Group's subsidiaries - Jiangsu Yabang Dye Co., Ltd. is striving to be listed in a domestic stock exchange in 2011. The funds to raise will be mainly used for building this hub.

   Yabang Group also pays attention to the operation and development situation of surrounding and peer enterprises. Once there is a good opportunity, it will take it and quickly acquire or merge other enterprises. Among its RMB12 billion sales revenue in 2009, RMB4 billion was achieved by its acquired enterprises. Mergers and acquisitions have effectively promoted the company to rapidly grow larger and stronger.