Daesang Welllife forms joint venture with Sinopharm Group

Daesang Welllife on Thursday said it has concluded a memorandum of understanding (MOU) with China Sinopharm International, an affiliate of China's largest pharmaceutical conglomerate Sinopharm Group, to form a joint venture.

The MOU signing ceremony at Daesang Welllife's Seoul office building on Wednesday was attended by company CEO Seo Hoon-kyo, Daesang Holdings CEO Choi Sung-soo, Daesang Corp. President Lim Jung-bae, Sinopharm Group Director Liu Yang, and Sinopharm International Chief Financial Officer and Sinopharm Healthcare Gov. Li Hao. For the conclusion of this agreement, core managers from the group arrived in Korea to visit Daesang Welllife's headquarters and research and production facilities.

The two sides will form a joint venture on the Yangpu peninsula in the city of Danzhou in Hainan province and build a plant to make food for special medical purposes (FSMP) and health functional food (HFF) using world-class production infrastructure and competitiveness.

China in recent years has seen a surge in chronic diseases such as cardiovascular ailments, diabetes and cancer, leading to higher demand for FSMP. Continued growth of this niche market is expected as Beijing lowers market barriers for entry by foreign companies.

Daesang Welllife's New Care is the top brand in Korea for food given to medical patients and its Welllife brand features HFF containing chlorella and arginine.

CEO Seo said, "We will cooperate with Sinopharm Group to stably boost our business portfolio on the Chinese HFF market, which is worth 70 trillion won ($54 billion)," adding, "Daesang Welllife will make this project a bridgehead for global expansion since it's our first overseas joint venture."

Write to Kyeong-je Han at hankyung@hankyung.com