A big Swiss drug company plans to pour up to US$20 million into expansion in China.

　　Novartis AG, the world's fifth- largest pharmaceutical company, plans to double its drugmaking capacity in China and set up a new company to make generic drugs in the country.

　　Beijing Novartis Pharma Ltd, in which Novartis holds a 78 percent stake, will start building its new drug producing facility in the third quarter of this year.

　　The project is expected to be finished in 2008, when the firm's annual production capacity will hit 2 billion pills/capsules.

　　"China stands out as the fastest growing market for Novartis and this drove us to expand business here," said James Liu, president of Beijing Novartis Pharma.

　　Beijing Novartis' sales hit a record last year of about 1 billion yuan (US$120 million), a year-on-year increase of 31 percent.

　　Novartis introduced four new drugs to China last year and the combined figure for the following two years will be six.

　　Beijing Novartis' targeted sales growth rate for this year is 35 percent and the firm plans to maintain 20 to 30 percent growth over five years.

　　The Beijing drug company will strengthen its sales force and tap more of the markets in northern and middle parts of China.

　　"We will hire up to 150 new salesmen each year in five years," said Liu.

　　The firm now has about 800 sales people. Part of the new sales force will go to tap the country's booming over-the-counter drugs business.

　　"In the past, we focused on our sales network in hospitals, which contribute about 80 percent of China's drug sales," Liu said. "The remaining 20 percent of drugs are sold through drug stores, a channel that Novartis will not miss from now on."

　　Novartis also plans to introduce its generic drugs business Sandoz to China this year.

　　Wang Guangqing, an analyst with Soochow Securities Co Ltd, said Novartis' expansion blueprint shows its confidence in China's pharmaceutical market.

　　He said tapping more into the over-the-counter business is wise.