Tax breaks, good management give Weifang enterprises competitive edge
“The zone’s tax deduction plans have helped us save millions of yuan a year, allowing us to report a strong net profit increase.”
Wang Jiong, executive vice- president of Wohua Pharmaceuticals
Shandong Wohua Pharmaceuti- cals, a leading medicine producer in the Weifang Hi-Tech Industrial Development Zone, and a company committed to developing ready-to- use traditional Chinese medicine and healthcare products, has reported stable growth in recent years.
Wang Jiong, executive vice-presi- dent of Wohua Pharmaceuticals, said that the company owns 14 inde- pendently developed ready-to-use TCM and healthcare products and has built its own production line to manufacture those products.
“Independently developed prod- ucts enable us to maintain competi- tiveness,” Wang said.
According to Wang, continuous investment in research and devel- opment is the key in promoting a pharmaceutical company’s develop- ment, and as such, Wohua Pharma- ceuticals has made huge investments in R&D to maintain its competitiveness.
However, increasing R&D costs has meant Wohua Pharmaceuticals has faced a heavy financial burden in recent years, Wang added.
To combat this issue, the develop- ment zone introduced a series of cost reduction policies to help Wohua ease its financial pressure in recent years.
“The zone’s tax deduction plans have helped us save millions of yuan a year, allowing us to report a strong net profit increase,” Wang said. “We have put more capital into new product development and expand production capacity.”
Wohua has also invested in smart production facilities to enhance its operational efficiency.
Like Wohua Pharmaceuticals, Shandong Huachen Pharmaceutical, also located in the zone, is paying close attention to upgrading and innovation. Huachen reduced its total number of products to offer a more specialized catalog to its cus- tomers.
The company, specializing in veter- inary medicine, started operation in 2001, and once supplied 42 types of products.
Its management team vowed to improve quality and develop prod- ucts of the same quality as that of imported medicines, and so it reduced its products to 13 between 2014 and 2016.
“We stopped producing some products to focus on specific prod- ucts and lower production costs,” said Wang Shaojuan, deputy general man- ager of Huachen.
Huachen has established an R&D center in the Silicon Valley in the United States to ensure it uses advanced technologies in its produc- tion.
Yu Shuo contributed to the story.