PPI does not win cost price pharmaceutical company profits are squeezed

Business News Agency August 10th News from the National Bureau of Statistics yesterday (9th) said that in July this year, the national industrial producer’s ex-factory price (PPI) was unchanged from last month, up 7.5% from the same period of last year. The purchase price of industrial producers rose 0.1% from the previous month and was up 11.0% from the same period of last year. From this, it can be seen that the cost increase is higher than the ex-factory price increase. For the enterprise, it means that the profit margin is squeezed.

More than 70 drug companies intend to increase prices

“The price of raw materials has risen too much.” The reporter contacted Tang Liangping, president of the Chongqing Pharmaceutical Industry Association and chairman of Chongqing Jiaodou Pharmaceutical. He was negotiating with several raw material suppliers and hoped that the purchase price of raw materials would not increase in the second half of the year. Too fierce.

According to the data previously released by the city, in the first half of this year, the factory price of industrial producers in the city rose by 3.7% year-on-year, and the purchase price of industrial producers increased by 5.6%. “It can be seen from this that the increase in the cost of buying raw materials by enterprises is greater than the ex-factory price increase.” Ding Yao, director of the Economic Consulting Research Center of the Comprehensive Economic Research Institute, said that this means that the company’s profit margin is greatly reduced. In addition, the price increase of PPI may eventually be transmitted to the CPI because if the producer shifts the cost, the price of terminal consumer goods will rise.

Tang Liangping stated that starting from last December, the prices of various raw materials used for pharmaceutical production rose. For example, the price of Panax rose from more than 300 yuan per kilogram to 700 yuan, and the price of schisandra increased from 70 yuan per kilogram to 120 yuan per kilogram. “However, because we are concerned that the citizens and customers do not accept it, we have not yet raised the price of finished products.” Tang Liangping said that at present, the profits of some drugs produced by the company have been greatly reduced, but considering that they cannot give up the market and other factors, these varieties Will continue to produce.

Tang Liangping revealed that if the price of raw materials continues to rise, the company plans to increase the ex-factory price of medicines for more than 10 varieties from September to October this year. It is expected that the increase will be around 20%. In addition, more than 70 manufacturing companies in the pharmaceutical industry association are brewing to raise the ex-factory price of pharmaceuticals. "If it is the type of companies that control and control pricing, companies can decide on their own price changes. After the ex-factory price is raised, the retail price will also be adjusted." Tang Liangping said.

Feed companies are unsustainable

“Recently everyone is saying that the price of meat has risen fiercely. It has been traced back to the upstream segment. The rise in feed prices is one of the reasons for the rise in meat prices.” Fang Shunbing, head of Chongqing Wanzhou Fangming Feed Co., Ltd., said that this year, feed production The cost has risen by more than 50%, especially for raw materials such as trace elements and corn. Prices have been rising all the way, making it very difficult for feed companies. The reporter learned that the cost of corn in feed ingredients accounts for 60%. In January of this year, the purchase price of corn was 2.20 yuan/kg, and it rose to 2.40/kg in June, an increase of 9.09%.

Fang Shunbing told reporters that because of the dramatic increase in costs, the company could only increase the price of finished feed products from more than 10,000 yuan per ton to more than 20,000 yuan per ton. However, the increase in finished products was still less than the increase in cost. The retail price of sales, each to sell a ton of feed, the company has to lose money, "but this is no way things, the competition is fierce, hastily raise the price is likely to lose customers." In addition to Fang Shunbing, Chongqing Today Feed Co., Ltd. and other feed Businesses have said that the cost has risen sharply and pressure has increased.

expert's point

PPI is very dangerous and price increases are not the only way to expand the market to survive

Yesterday, the National Bureau of Statistics announced the July economic data, PPI rose to 7.5%, setting a new high. As for the reasons for the PPI's new record, economic experts generally believe that it is mainly caused by inflation. Super money and speculative control are also some of the reasons. However, due to the recent sharp corrections in international oil prices and commodity prices, coupled with the fall in domestic pork prices, the peaking of the PPI in July will be a high probability event. In addition, under the influence of international factors such as the downgrade of the US debt rating, commodity prices will decline, and the PPI will also fluctuate.

Statistics released by the Bureau of Statistics on the morning of August 9 showed that the CPI in July increased by 6.5% year-on-year, reaching a record high for three years. Lu Ting, an economist at the Bank of America Merrill Lynch, issued a report saying that the increase in CPI was slightly higher than expected and the increase in PPI was in line with market expectations. With pork prices starting to stabilize and global oil prices falling, he expects CPI and PPI to peak in July and steadily decline for the remainder of the year. The famous financial commentator Ye Tan said that if the PPI continues to rise, the economic operation in the second half of the year will remain high. "If you keep doing this, it is dangerous."

The macroeconomic data review report issued by the Bank of Communications Jinying Center pointed out that domestic industrial production still maintained rapid growth, and international commodity price shocks pushed the PPI back up again. In July 2011, the CRB spot index remained at a high level around 550. However, given the relatively high probability of a slowdown in the world economic growth during the year, the demand for commodities may decrease, and it is unlikely that further increases in commodity prices will occur in the near future. In the future, domestic import inflationary pressures will ease somewhat. The PPI should be adjusted back after the quarter.

"From the published data, the higher PPI was mainly attributable to the 18.9% increase in prices of nonferrous metal materials and the 12.6% increase in fuel-power prices. However, the recent plunge in the futures market and foreign crude oil may cause the August PPI to drop. "Zheshang Securities Lai Yilei said that in the near future, because the inflation control policy has not been relaxed, SMEs are faced with difficulties such as price increase of upstream products and lack of liquidity, which will have a great adverse impact on the survival and development of enterprises. At present, the short-term response measures of enterprises, in addition to price increases, reducing expenditures, and controlling costs, should also strive to expand the market and take the road of independent innovation.