Jinan Zhuocheng Bio-Tech Co., Ltd.

Facing rising trade barriers in Europe and the United States, restructuring global pharmaceutical supply chains, and intensifying international competition, China’s active pharmaceutical ingredient (API) industry is exploring new routes for global expansion. North Africa, the Middle East, and the Mediterranean region are increasingly becoming strategic destinations for Chinese pharmaceutical companies, with the concept of the “Mediterranean manufacturing hub” gaining industry attention.

Since 2026, China’s API export environment has undergone significant changes. On one hand, the United States continues to promote pharmaceutical supply chain localization and encourage domestic manufacturing. On the other hand, the European Union has strengthened trade protection measures for certain Chinese pharmaceutical products, creating new challenges for international market expansion.

According to industry data, from January to May 2026, China’s exports of APIs and pharmaceutical intermediates reached approximately US$19.24 billion, representing a year-on-year increase of 3.9%. Export volume increased by 9.1%, but price growth remained limited, reflecting continued pressure on traditional bulk API segments. Among them, vitamin-related pharmaceutical products recorded a 21.7% year-on-year decline in import and export value.

Amid higher market access requirements in Europe and the United States, intensified competition from India’s low-cost manufacturing sector, and growing pressure from Southeast Asian suppliers, the traditional model of “manufacturing in China and exporting overseas” is undergoing transformation. More Chinese pharmaceutical companies are now expanding overseas through local production facilities, technology partnerships, and regional supply chain development.

Industry analysts believe that North Africa is emerging as a promising location for pharmaceutical investment due to its geographical advantages, cost competitiveness, trade connectivity, and strategic position linking Europe, the Middle East, and Africa. The “Mediterranean manufacturing hub” model is not simply a transfer of production capacity, but rather a comprehensive strategy integrating high-value APIs, finished dosage manufacturing, local registration, and regional supply capabilities.

Several Chinese pharmaceutical companies have already accelerated their expansion into the Middle East and North Africa (MENA) markets.

In April 2026, Nanjing Norate Biopharma (Nortai Biopharma) announced a long-term cooperation agreement with Julphar, one of the largest pharmaceutical companies in the United Arab Emirates. The partnership focuses on semaglutide API supply and technology transfer, marking a further step for Chinese high-end peptide API companies into international markets.

Meanwhile, Truking Technology has expanded overseas through pharmaceutical equipment and engineering solutions. In May 2026, the company reached a technical cooperation agreement with Algeria’s state-owned pharmaceutical company Saidal Group for an oncology drug production facility project, providing integrated solutions covering equipment, engineering, and manufacturing standards.

Other Chinese pharmaceutical companies are also strengthening their presence in the region. Dongyue Pharmaceutical’s insulin products have entered markets including the UAE and Algeria, while Bio-Thera Solutions has granted commercialization rights for certain biosimilar products in the Middle East and North Africa, accelerating regional market development.

Industry experts point out that the future value of North Africa for Chinese API companies will not come from relocating low-value production capacity, but from establishing a comprehensive model combining specialty APIs, finished formulations, local regulatory capabilities, and regional supply chains.

Currently, China’s API industry is experiencing increasing structural differentiation. Traditional bulk products such as antibiotics and vitamins continue to face oversupply and price competition, while high-value segments—including hormone APIs, GLP-1-related products, specialty APIs, and pharmaceutical formulations—are becoming new growth drivers.

In the first quarter of 2026, China’s pharmaceutical formulation exports showed significant improvement, with high-value products becoming an increasingly important driver of international growth. This trend reflects the industry’s transition from cost-driven competition toward technology, quality, and compliance-based competition.

From a strategic perspective, three categories of companies are expected to benefit most from the Mediterranean expansion strategy:

First, companies with advanced product pipelines and international registration capabilities.
Enterprises focusing on GLP-1, peptide drugs, hormone products, and other high-value APIs are expected to leverage North Africa and the Middle East as gateways to broader global markets.

Second, companies with integrated API and formulation capabilities.
Companies that combine API manufacturing, finished dosage production, and international regulatory experience are better positioned to establish localized operations overseas.

Third, pharmaceutical equipment and engineering solution providers.
As North African countries seek to strengthen domestic pharmaceutical manufacturing capacity, Chinese companies providing pharmaceutical equipment, facility construction, and GMP solutions may gain new opportunities.

However, overseas expansion also presents challenges. Currency fluctuations, foreign exchange controls, regulatory differences, and lengthy GMP certification processes remain important factors that companies must manage when investing in overseas facilities.

Industry observers note that China’s API sector is gradually shifting from a cost-driven export model toward a global value-chain integration model. The “Mediterranean manufacturing hub” strategy represents not simply production relocation, but a broader transformation from product export to industrial globalization.

Over the next three years, companies with strong technological capabilities, international compliance systems, and global supply chain integration advantages are expected to gain greater competitiveness in the evolving pharmaceutical landscape.

China’s next growth opportunity in the API industry may extend beyond traditional manufacturing bases toward the Mediterranean region, opening a new chapter in the globalization of Chinese pharmaceutical manufacturing.