Table of Contents 1. Executive Summary 2. Project Background 3. Market Opportunities 4. Company Strategy 5. Marketing 6. Production Management 7. Investment Analysis 8. Financial Analysis 9. Management System 10. Opportunities and Risks 10. 1. Withdrawal of venture capital Appendix 1. Market capacity estimation table 2. Market research and qualitative analysis form 3. Financial Schedule 1. Executive Summary 1.1. The Company Chitin Materials Research & Development Co., Ltd. is a proposed company. It has patented technology for the preparation of chitin fiber, advocates a new concept of science and technology-based green life, and provides perfection for mankind. of natural biological products. The annual market demand for medical sutures in my country is approximately RMB 1.5 billion, of which approximately RMB 750 million are absorbable sutures. In the early days of its establishment, the company produced medical chitin absorbable sutures to meet the needs of the rapidly developing absorbable suture market. It used investment and factory building solutions to solve the large problem of PGA (Polyglycolic Acid) absorbable sutures. Partial dependence on imports, high prices, and problems that affect the improvement of people's medical standards. The company focuses on the combination of short-term goals and long-term strategies. The medium and long-term goals will gradually expand the product field, involving chitin medical antibacterial materials, drug sustained-release materials, artificial organs, cosmetics, health food, health clothing fabrics, new environmentally friendly packaging materials, and fast food utensils. etc., forming a diversified business group company with chitin materials as the core. 1.2. Market The medical suture market is a group market, and the purchasing process is a group purchasing behavior. At present, the medical sutures widely used in my country mainly include silk thread, catgut and PGA absorbable thread. The catgut material itself has defects, the production cost of PGA sutures remains high, and the scope of use is affected. Medical chitin sutures will enter the market at this entry point. Medical chitin sutures enter the market using a competitive pricing strategy. The production cost of the product is about 2.1 yuan/piece, which is one-tenth of that of PGA sutures; the average price is 30 yuan/piece (according to the survey, the market acceptable price is 30-40 yuan/piece), which is about the average price of PGA sutures. 1/2 of the market price, and there is a lot of room for price reduction. The company will set up seven regional distribution centers across the country and establish a sound marketing network with agents and dealers. When the product enters the market, a large number of products will be given away for doctors to try as a means of promotion and to increase market share. 900,000 pills will be given away in the first year, 1.6 million pills will be given away in the second year, and 800,000 pills will be given away every year after the third year. The internationally leading patented technology for preparing chitin fiber is the key to preparing medical chitin sutures. The company will establish an ISO9000 quality management system and strive to obtain international ISO9000 quality management certification. 1.3. Investment and Finance The company is located in Wuxi and enjoys the preferential tax policy of “three exemptions and three half reductions”. In the initial stage of establishment of the company, capital of 11 million is required. Among them, venture capital is 7 million, Donghua University has invested 1 million, and short-term loans are 3 million. Among them, 6.02 million was used for fixed asset investment and 4.98 million for working capital. In addition, Tianchun Biomaterials Co., Ltd. Equipment invested 1 million shares. The scale and structure of share capital are tentatively determined as: the company’s registered capital is 12 million. Foreign venture capital invested RMB 7 million (58.33%); ××× patented technology invested RMB 3 million (25%), capital invested RMB 1 million (8.33%); ××× company equipment invested RMB 1 million (8.33%). It is estimated that the profit will be 10 million yuan in the second year, and the annual sales profit rate will be about 45% in the future. The return on assets in the second year will be 75.39%, and the investment payback period will be two years and one month. It is best to withdraw risk funds in the third to fifth years, and the acquisition method is more suitable for the company. 1.4. Organization and Human Resources The nature of the company is a limited liability company, and the initial organizational structure adopts a linear system. The company's ownership and management rights are separated, and a general manager responsibility system is implemented. Under the general manager are the deputy general manager of marketing, deputy general manager of technology and deputy general manager of finance. The chitin fiber preparation technology patent belongs to Donghua University, and teachers such as Professor Tan Zhiqing are the inventors of the patented technology. Professor Tan Zhiqing has many years of experience in the industrialization of scientific and technological achievements and will serve as the company's chairman and deputy technical general manager; members of the entrepreneurial team will participate in the company's marketing and financial management work; the company has also hired Professor Gu Qingliang from the Marketing Department of Donghua University as Marketing consultant.
2. Project background 2.1. Industrial background In recent years, my country's medical device industry has developed rapidly. In 1978, the total output value of my country's medical device industry was 730 million yuan. By 1995, according to statistics from the State Administration of Medicine, it was 8 billion yuan. Investigations by relevant parties during this period showed that the actual total output value of the national medical device industry reached 16-18 billion yuan, equivalent to 22-25 times that of 1978, accounting for approximately 16% of the world's total output value. About 2% of sales. The development of my country's medical device industry lags behind that of the chemical drug industry. The ratio of medical device to drug sales in developed countries is close to 1:1, while in my country it is only 1:10, so there is huge room for expansion. According to surveys, the value-added range of high-performance medical textiles can reach about 1:50. At present, there are three types of medical sutures widely used in my country: silk thread, catgut and PGA absorbable thread. Catgut and PGA sutures are absorbable sutures. The production technology of catgut is backward, pollutes the environment, has poor absorbability, and is prone to allergies and antibody reactions. Currently, it exists solely due to the price advantage. PGA absorbable sutures rely heavily on imports, which not only costs a lot of foreign exchange, but also increases the economic burden on the country and surgical patients. It also has a certain impact on the improvement of my country's surgical level. According to a report by the Taiwan Industrial Technology Research Institute, the global market value of medical sutures was estimated at US$1.5 billion in 1994, with an annual growth rate of approximately 4%. According to the Taiwan Institute of Chemical Industry, there are only three factories in the world that produce PGA raw materials, which are extremely difficult to obtain and the price remains high. In addition, too high a moisture content of PGA will lead to hydrolytic deterioration of the material, a decrease in mechanical strength, and the quality of the suture will be seriously affected. As a pure biological product, absorbable sutures using chitin as raw materials can be completely absorbed by the human body and have no toxic side effects. They can meet all the indicators of absorbable sutures and are in line with the social development theme of green and environmental protection. They are PGA-type Alternatives to absorbable sutures. On the basis of absorbing the advantages of imported absorbable sutures, it is in line with social and market requirements to develop chitin absorbable sutures with superior performance and affordable prices. The production of medical chitin absorbable sutures is pioneering on a global scale and will have long-term economic and social benefits in promoting the development of my country's medical device industry, improving people's medical standards, and reducing the country's foreign exchange burden. 2.2. Product Overview (omitted) 2.3. Advantages of Chitin-Absorbable Sutures Clinical experiments have proven that compared with existing sutures, medical chitin-absorbable sutures have the main advantages of being an absorbable surgical suture: ． Pure biological products, good compatibility with human body, small wound suture scars; . Raw materials are widely found in marine organisms, and the cost is one-tenth of PGA products; . An environment that inhibits bacterial growth is formed around the thread, which is conducive to wound healing; . Non-toxic, non-irritating, no antibody reaction, and can be completely absorbed by the body; . Sufficient tensile strength and flexibility, fully meeting the requirements for preparing absorbable sutures; . Easy to preserve and hardly decomposes in air; . Can withstand sterilization and disinfection, and can be dyed, antiseptic, etc.; . Senior professors, experts, and researchers are responsible for scientific research, with strong R&D capabilities and internationally leading patented technologies. 2.4. Chitin application prospects Chitin is a natural polymer and a new type of environmentally friendly material. It has a wide range of uses in medicine, agriculture, light industry and other fields. In medicine, it can be used to make artificial skin, drug sustained-release materials, hemostatic and wound healing agents, artificial organs (such as artificial kidneys, artificial blood vessels), etc.; in agriculture, it can be used to produce chitosan and chitin-coated pesticides. , degradable mulch film, etc.; in light industry, it can be made into cosmetics, health care products, functional clothing, environmentally friendly packaging materials, etc. 3. Market opportunities 3.1. Market characteristics 3.1.1. Overview The actual consumers of medical sutures are patients, the users and purchase decision-makers are surgical surgeons and head nurses, and the actual buyers are the purchasing department. Market characteristics present the particularity of separation between users, purchasing decision-makers and buyers. The medical suture market is a group market, the purchasing process is a group purchasing behavior, and personal selling is the most effective sales method. Doctors first select the type and specifications of sutures based on the type and requirements of the surgery, which are also affected by factors such as usage habits, brand preferences, and regional differences. Sutures belong to the category of medical devices, and the macro policies and regulations formulated by medical and health management agencies such as the State Administration of Medicine and the Health Bureau will have an important impact on their development.
The sales of medical devices must have three complete certificates. The three certificates are "Medical Device Production License", "Medical Device Sales License" and "Product Qualification Certificate". Some places also require a "Sale Permit" issued by the local health authority. . 3.1.2. Purchasing decision-making process In purchasing decisions, doctors and operating room head nurses play a very important role. Some are even designated or purchased by the head nurse (especially hospitals below the second level), and a very small number of hospitals make purchasing decisions by the administrative department. The decision-making model is mainly shown in the figure below: Figure 1. 3.2. Market segmentation According to the degree of market development, the domestic medical suture market is mainly divided into two categories: 3.2.1. The developed absorbable suture market refers to the use of sheep intestines Thread and PGA type absorbable suture market. ． Markets that use a large number of PGA absorbable sutures: This type of market is mainly distributed in hospitals in big cities with high levels of economic development and high medical standards, such as Beijing, Shanghai, Guangzhou, etc. The main market characteristics are as follows: manufacturers have basically completed the preliminary publicity for the use of PGA absorbable sutures, with high acceptance by doctors and high brand loyalty among doctors; absorbable sutures are widely used and have been used for a long time; they are less sensitive to price ; Consumption behavior is relatively mature. ． Markets where catgut is widely used: This type of market is mainly distributed in hospitals in large and medium-sized cities with relatively low levels of economic development, such as Xi'an. The main market characteristics are as follows: absorbable medical sutures mainly use catgut, and PGA absorbable sutures have not yet been used on a large scale; doctors are relatively receptive to absorbable sutures; they are more sensitive to price; and brand loyalty is low. high. 3.2.2. The untapped absorbable suture market refers to the market where absorbable sutures should or can be used while still using silk threads. This type of market is mainly distributed in small and medium-sized urban hospitals with low economic development levels and limited medical standards or small hospitals in big cities. The main market characteristics are as follows: doctors are less exposed to or use PGA absorbable sutures; silk threads are commonly used in surgeries; they are very price sensitive; PGA absorbable sutures have not yet entered this type of market, and competition is slow. 3.3. Sales channel analysis According to the survey, the main sales channels for medical sutures are: . Factory direct sales/local agent sales PGA absorbable suture manufacturers mainly use this method. Through local agents, entry barriers can be reduced and new markets can be entered smoothly. Factory direct sales are suitable for markets with low entry barriers. Hospitals generally trust local agents, who handle problems in a timely manner and whose reputation is guaranteed. The sales process mainly looks like this: Figure 2. Omitted. Sales through medical device wholesale companies are mainly domestic silk thread and catgut manufacturers. They have established a huge sales network through medical device companies and dealers at all levels, with smooth sales channels, and have solid business with major traditional Chinese medicine hospitals across the country. The relationship is relatively less affected by human factors. Figure 3. Omitted 3.4. Competitive analysis 3.4.1. Competing products and competitors. Silk thread: It is cheap and ordinary silk thread is still widely used in surgery. Shanghai Pudong Jinhuan Medical Products Co., Ltd. occupies the vast majority of the national silk thread market share, followed by Johnson & Johnson's "mousse thread" from the United States, which is also commonly used in large domestic hospitals. There are also domestic manufacturers in Tianjin, Hangzhou, Wuxi, Nantong and other places. . ． Catgut: It is cheap and widely used in obstetrics and gynecology and other surgeries. It is inconvenient to use and can easily cause inflammation. It is in the stage of being gradually replaced. Manufacturers are mainly located in Shanghai, Tianjin, Hangzhou and other places. ． PGA absorbable sutures: Most of them are imported. They are also produced in Nantong, China. The price is relatively high. The largest manufacturers are Johnson & Johnson and Cyanamid (Kendall) from the United States. Mainly using door-to-door sales and giving away a large number of products for trial use to capture the market. According to the survey, Johnson & Johnson and Cyanamid account for more than 80% of the market share of absorbable sutures in Shanghai; secondly, Nantong's "Huali Kang" also has a certain proportion. The price of "Hualikang" is roughly 60% of that of Johnson & Johnson and Cyanamid, but its price advantage is basically offset by its imperfect after-sales service and quality problems. 3.4.2. Analysis of competitive influence (omitted) 3.4.3. Competitive advantage: superior performance of chitin suture itself; monopoly on proprietary technology and talents; cost advantage; strong resource availability; high and new technology in line with government policies Development direction, etc. 3.5. Market Capacity 3.5.1. Market Capacity It is estimated that the domestic medical suture market capacity in 1999 was approximately **1.5 billion RMB.
According to surveys and second-hand data, the current usage of absorbable sutures accounts for only about 5% (including catgut and PGA sutures), but the amount accounts for about 50% of the total, about 750 million. (Note: **See Appendix 1, P29 for the estimation process). 3.5.2. Trend analysis and forecast According to the Taiwan Industrial Technology Research Institute report, the annual growth rate of the global medical suture market is 4%. According to surveys, PGA suture products have only developed about 10% of the absorbable suture market, and the market potential is huge. At present, medical absorbable sutures are mainly used in major surgeries (such as thoracotomy, abdominal cavity, etc.). PGA absorbable sutures mainly rely on imports, and the country has strict restrictions on them. Considering the market growth, the annual sales of chitin sutures are estimated to reach about 100 million in five years. 3.6. The impact of policy guidelines and WTO (omitted)