Shengtai Pharma Seeks Global Growth

Shengtai Pharmaceutical, Inc. (SGTI.OB) will begin a push to sell its pharmaceutical grade glucose products internationally. To get this done, the company has restructured its international sales team.

The company said it already has customers in 70 countries, but according to SEC documents, Shengtai realized just 17% of its pharmaceutical product revenues from foreign countries in fiscal 2008 (ended June 30). The main markets were South Korea, Russia, Australia and Singapore.

As we reported earlier, Shengtai experienced substantial revenue growth of 76% in its fiscal 2008. However, the company’s pharmaceutical grade glucose products were flat year-over-year, largely because of production capacity restraints. As a result, pharmaceutical grade glucose contributed just 32% of revenues in 2008 against 62% in 2007.

Since then, Shengtai has added capacity, raising its annual product capability by 120,000 tons to approximately 180,000 tons. As a result, the company is seeking new markets as it ramps up production in its new facility.

The China market is expected to grow the most of any country worldwide, but Shengtai is taking a more aggressive approach to increasing its revenue by selling overseas, where it expects to enjoy a cost advantage. Overall, experts estimate domestic revenues from the China pharmaceutical industry will increase at a 15% annual clip.

Disclosure: none.