ITOCHU Announces Conclusion of Comprehensive Business Alliance with BAHEAL PHARMACEUTICAL GROUP of China

May 11, 2018

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced today that it has entered into a comprehensive business alliance with BAHEAL PHARMACEUTICAL GROUP (headquartered in Qingdao, China; Fu Gang, Chairman of the Board; hereinafter “BAHEAL Pharmaceutical Group”) (hereinafter the “Agreement”) related to the pharmaceutical and healthcare industry.

BAHEAL Pharmaceutical Group was established in 2005 and conducts advanced and innovative activities in the pharmaceutical and healthcare industry in China.
Its business includes promotional campaigns directed at doctors and consumers utilizing IoT, medical big data and social media, the distribution of imported over-the-counter (OTC) drugs and medicines, health foods and other healthcare products, prescription drugs and medicines (ethical drugs and pharmaceuticals) (hereinafter the “global brand business”), a platform for information sharing that connects hospitals, medical insurance companies and pharmacies upon separation of a medical and dispensary practice, and the business of cancer treatment utilizing artificial intelligence (AI) (hereinafter the “intelligent application business”) and the business of stimulating investments.
BAHEAL Pharmaceutical Group is expanding towards the realization of a future-generation model platform for distribution and sales.

The Chinese Government announced a summary of the national policy mainly for the health promotion of the people, the “plan for a Healthy China 2030” (hereinafter “Healthy China 2030”) at the end of 2016.
The said plan positions the healthcare industry as the main industry to support the national economy.
Related markets are forecasted to reach as much as 16 trillion yuan in 2030.
Accordingly, there will be more opportunities for investment in the pharmaceutical business, distribution of medicines and drugs, medical equipment, medical treatment service and other related fields.

ITOCHU has already engaged in wholesale and distribution of pharmaceutical products in China through its subsidiary, a joint venture with Alfresa Holdings Corporation, Rameje Pharmaceuticals (China) Co., Ltd.
To further expand business in China’s pharmaceutical and healthcare industry, which is expected to grow, ITOCHU will consider and conduct joint business in the following areas with BAHEAL Pharmaceutical Group under the Agreement.

(1) Offering of highly safe OTC drugs, functional cosmetics, health foods and others in the Chinese market
Import of, promotional campaigns for, distribution and sales of high-quality OTC drugs, functional cosmetics, functional foods and others from Japanese manufacturers in China

(2) Offering of prescription drugs and medicines (ethical drugs and pharmaceuticals) in the Chinese market
Sales expansion of highly safe, high-quality prescription drugs from Japanese manufacturers directed at Chinese hospitals and pharmacies (including the mail-order business via the Internet) and the introduction of pharmaceutical technologies from Japanese pharmaceutical companies and others in China

(3) Entry into the personal healthcare business field
Import, distribution and sales of products for the elderly and equipment related to healthcare for home use in China

(4) Entry into the advanced technologies and services field
Creation of new business making the most of AI, IoT and other advanced technologies, specifically cancer treatment, genetic analysis and sales of information sharing systems

(5) Overseas business expansion
Offering the products and services of BAHEAL Group in Japan and global markets by making use of the knowledge and experience in the Chinese market

(6) Joint investment business
Joint investment in companies (including ventures) engaged in the business described above and the establishment of joint investment funds

The first project under the business alliance is an agreement by Qingdao BAHEAL pharmaceutical CO., LTD., the main subsidiary of BAHEAL Pharmaceutical Group with the largest sales records of imported OTC drugs in China, to accept the issue of equities of Rameje Pharmaceuticals (China) Co., Ltd. upon third-party allotment for capital increase.

BAHEAL Pharmaceutical Group

Representative Fu Gang
Head office Qingdao, Shandong, China
Foundation March 2005
Business description Distribution of OTC drugs, prescription drugs, medical services and others
Number of employees about 3,000


Company name Rameje Pharmaceuticals (China) Co., Ltd.
Representative Kensuke Kanai
Head office Huizhou, Guangdong, China
Establishment May 2005
Business description Import and export and wholesale of pharmaceutical products, medical equipment, cosmetics, health foods and others in China

Signing ceremony for the comprehensive business alliance in May 2018