Sanofi-Aventis Group, Europe's largest pharmaceuticals company, will spend 700 million yuan ($95.5 million) to build a new flu vaccines plant in Shenzhen in southern China, the largest biopharmaceutical investment ever by a foreign drug maker in China, the French company announced yesterday.

Construction on the plant, to be run by Sanofi-Pasteur, the vaccines division of Sanofi-Aventis, is expected to commence early 2008 and would produce 25 million flu doses annually once production begins in 2012.

The plant agreement was one of several business deals signed yesterday in the presence of Chinese President Hu Jintao and visiting French President Nicolas Sarkozy.

"The time is right for Sanofi Pasteur to further invest in China as China is joining a growing number of countries focusing on the prevention of diseases," Gerard Le Fur, chief executive officer of Sanofi-Aventis, said.

Last year, Sanofi's vaccine packaging plant in Shenzhen delivered 5 million doses of flu vaccine. Its sales of vaccines in China amounted to 600 million yuan so far this year, up 20 percent from a year earlier.

The new facility will also make it possible for Sanofi Pasteur to rapidly switch production from seasonal flu vaccines to a pandemic flu vaccine if required, Sanofi Pasteur International president Jacques Cholat, said.

"Products from the Shenzhen plant will satisfy the demand of Chinese market rather than for exports," Le Fur said.

In 2006, the Chinese vaccine market represented some 850 million doses, making China the number one vaccine market worldwide. And the market is growing rapidly, with the number of doses of flu vaccine expected to grow from 12 million in 2003 to 108 million in 2020, industry statistics show.

According to Cholat, this growth is being driven by rapid urbanization, higher numbers of travelers both to and from China, higher incomes and a growing elderly population.

Currently, only 5.12 percent of Chinese under the age of 18 is vaccinated for the flu, but this share is targeted to increase to 15 percent over the next few years, Cholat said.

Le Fur added: "If the market continues growing rapidly, we plan to double our capacity within 10 to 15 years".

Sanofi-Aventis has been in China since 1982. It is now the sixth largest player in the country's 120 billion yuan pharmaceuticals market, with annual domestic sales of about 2 billion yuan.

(China Daily November 27, 2007)