SHANGHAI, Mar 28, 2008 (SinoCast via COMTEX) -- Shanghai Suzuken Huzhong Pharmaceutical Co., Ltd., a 50-50 pharmaceutical distribution joint venture between China's pharmaceutical manufacturer Shanghai Pharmaceutical Co., Ltd. (SHSE: 600849) and Japanese pharmaceutical distributor Suzuken Co., Ltd., was formally set up in Shanghai on March 26.

The venture, based of Shanghai Huzhong Pharmaceutical Co., Ltd., a wholly owned subsidiary of Shanghai Pharmaceutical, expects to lift up both its sales revenue and net profit by 20 percent and 30 percent within one year.

In order to set up the venture, Shanghai Pharmaceutical sold a 50 percent stake in Shanghai Huzhong Pharmaceutical to Suzuken, from which the Chinese pharmaceutical giant gained a premium of more than CNY 10 million.

Besides a 50 percent bonus, the Chinese parent can obtain no less than CNY 29 million service fee from the venture in line with a 20-year contract it inked with the Japanese company. The figure will be lifted annually with the growth of the venture's sales.