Tomahawk, WI 11/10/2014 (Basicsmedia) – In an interview on CNBC, Johnson & Johnson (NYSE:JNJ)’s Chairman and CEO, Alex Gorsky, outlined their opportunities in China. The company is interested in expanding its operations in China, especially in meeting currently unmet medical needs. The CEO also touched tax inversion but downplayed that issue saying that it was not a key factor in their pursuit of growth. Gorsky was speaking on the sidelines of APEC CEO Summit.
“In terms of growth China does represent the No. 1 global opportunity. If you think about the market here, the people, the unmet medical need all the different opportunities. We’ve been here for about the last 30 years from early 1980s […],” said Gorsky.
Johnson & Johnson (NYSE:JNJ) is more interested in growth in China and the company will do so through a combination of manufacturing operations and research and development projects. They think that boosting research and development in China will fuel growth in the market in the future.
“In China if you look at the health care, the overall market is growing at about 15%. It is really being driven by a few dynamics. One is certainly the topic of conversation here in this meeting, it is the aging population it is estimated that there are about 100-150 million people over the age of 65 in China today. For over the next 20 or 30 years that number was projected to go to almost 360 million,” explained Gorsky.
For Johnson & Johnson (NYSE:JNJ), opportunities are easy to recognize in China. The company is particularly seeking out the unmet medical needs especially in areas like lung cancer. In China, the company has a $3 billion business that covers a wide range of areas that include medical devices. The Wall Street Journal reported that medical devices contributed a half of the total revenue that Johnson & Johnson generated in China in 2013. The segment also grew 10% from the previous year.
Gorsky said that they were considering many factors to grow the company and tax inversion was one of them. However, he didn’t see Johnson & Johnson (NYSE:JNJ) pursuing a deal purely on the basis of tax benefits because he said tax environments are bound to change.