Vitapharm executive director Terry Au Yeung (left), and chairman Thomas Ko have relocated to Hong Kong as a base for expansion to the Chinese mainland, US and Europe

"We have established a unique business model for the pharmaceutical industry, combining Australian technology with the Chinese market to maximise company growth and revenues," said the chairman, Hong Kong-born Thomas Ko, who founded the company in Australia in 1998.

Ko went to Melbourne almost 40 years ago to study pharmacy, and started his first company, Vitapharm Pharmaceutical, in 1971. He was later joined by Hong Kong-born Terry Au Yeung, now the company's executive director, who had gone to Australia to study medicine.

With a view to the potential in the Chinese mainland market, the two business partners established Vitapharm Research in the late 90s to focus on drug delivery systems and biopharmaceutical products.

The company started manufacturing Osteoform, a treatment for osteoporosis, in Wuhan. Encouraged by the mainland government's Go West policy, Vitapharm last year built a plant in Chengdu manufacturing a pessary to fight infections that could lead to cervical cancer.

Further eyeing expansion, Ko and Au Yeung returned to their origins in Hong Kong to raise capital.

In February this year, Vitapharm's parent company Vital Biotech Holdings listed on the Growth Enterprise Market, raising more than HK$130 million (US$16.7million).

Ko says they chose Hong Kong rather than Australia to list the company in the belief that local investors would better understand the potential for their products in China.

"Most of our income is from China," he said. "In Hong Kong it is easier to explain our Chinese operation. It is a very cosmopolitan place."

Recently Ko moved his base back to Hong Kong. The company now has more than 28 marketing offices in the mainland and operates research and development facilities in both Melbourne and Chengdu. It has more than 700 staff in Hong Kong, China and Australia.

Having established themselves on the mainland where they still see plenty of growth potential, Ko and Au Yeung are looking to expand into other international markets in the US and Europe. Vitapharm recently signed an agreement to distribute Osteoform in Russia and has technology co-operation partnerships with several international drug companies.

Christopher Rees, who heads up the Hong Kong office of the Australian government's trade promotion body, Austrade, says Vitapharm is a "very clever company that applies an innovative approach not only to the technical aspects but the commercial aspects of their business".

"They have a good network of agents on the ground in China who feel part of the overall Vitapharm family and who are very motivated to go out and sell their product," he added.

Vitapharm's success was recognised earlier this year when it won the annual award given by the Australian Chamber of Commerce in Hong Kong for business innovation.

Related links:
Vitapharm Research www.vitapharm.com.au
Growth Enterprise Market www.hkgem.com
Australian Chamber of Commerce in Hong Kong www.austrade.gov.au/home