TOKYO -- Japanese drugmaker Tsumura plans to capitalize on its partnership with China's Ping An Insurance Group to expand its herbal medicine sales in China to 10 billion yuan ($1.57 billion) by 2027.
"We aim to become the top brand of traditional Chinese medicine there," Tsumura President Terukazu Kato told reporters in Tokyo on Wednesday.
Ping An bought about a 10% stake in Tsumura last year. The two companies will set up a joint venture in April, of which Tsumura will own a majority.
Although Tsumura claims more than 80% of the Japanese market in traditional Chinese medicine, its Chinese operation accounts for less than 0.1% of total sales.
Ping An operates a chain of clinics and an online health care service that handle up to 250,000 patients a day through a network of more than 60,000 doctors.
Tsumura aims to sell its products through Ping An's existing Chinese sales channels, starting with crude drugs for decoction and other products.
The Japanese drugmaker also wants to leverage Ping An's information technology capabilities. "We will take advantage of big data, artificial intelligence and other technologies to bring about innovation in the Chinese market," Kato said.
Potential areas include automating the sorting of crude drugs and optimizing their cultivation.
The joint venture also plans to set up a research center in China sometime around 2020 to improve Tsumura's drugmaking operations. The center may also provide services to other drugmakers.
In China, a law promoting traditional Chinese medicine went into effect in 2017, a development that Tsumura sees as possibly boosting demand for high-quality medicine.
Tsumura expects to post 120 billion yen ($1.12 billion) in group sales for the year through March, up 5% from the previous year. If Tsumura's Chinese venture goes as planned, sales in China will exceed that of its domestic operation in 10 years.