Asia's richest businessman Li Ka-shing would invest 100 million yuan (US$12 million) to establish a joint venture with Guangzhou Baiyuanshan Pharmaceutical Co. Ltd. to expand the traditional Chinese medicine business, China's leading financial newspapers reported Monday.

The joint venture would be 50:50 owned by the Guangzhou-based company and Li's Hutchison Whampoa Ltd. (HWL), the Shenzhen-based Securities Times said.

The new company would focus on developing and producing traditional Chinese medicine products and could use the two partners' trademarks including Baiyunshan, BYS, Hutchison Whampoa and HWL, the companies said at the signing ceremony.

The deal marked Hutchison's latest step to strengthen its presence in the booming traditional Chinese medicine market.

In 2000, Hutchison formed a joint venture in Hong Kong with China's oldest medicine maker Tongrentang, which has a history of 335 years. Later in the year, Li bought 60 million shares of Tongrentang's listed arm, Tongrentang Science and Technology Inc., remaining its second-largest shareholder since then.

Two years later, Hutchison established another venture with Tongrentang, Beijing Tongrentang Hutchison Pharmaceutical Investment Co., with total investment of US$239 million.

Guangzhou Baiyunshan, one of the country's leading medicine makers, posted a net profit of more than 7.2 million yuan for the first three quarters of this year.

(Shenzhen Daily November 30, 2004)