Chinese manufacturer opens US office to benefit from 'made in USA' halo

02-Feb-2017 - Last updated on 02-Feb-2017 at 17:23 GMT

Lei Wu is the CEO if Ideal Health Biotechnology. Ideal Health photo.

A Chinese company called Ideal Health Biotechnology has joined a raft of businesses from that country in relocating to the US to gain a ‘made in USA’ positioning.

Ideal Health recently opened an office in Kannapolis, NC, in the North Carolina Research Campus, a public/private partnership. The campus was established in 2005 by David Murdock, CEO of Dole Foods Co. in cooperation with the University of North Carolina system and the state of North Carolina.

“The NCRC is a great place for our company to grow through research partnerships. There are a lot of resources here for us, and we are grateful for the opportunity. If the NCRC wasn’t here, we wouldn’t be in the US,” said Ideal Health CEO Lei Wu.

Wu said the goal of the relocation is both to leverage the research resources as NCRC as well as to manufacture products in the US for export to the Chinese market. Products made under stricter US guidelines continue to have a halo of quality for Chinese consumers.

Scott Steinford is CEO of the CoQ10 Association which has a number of Chinese companies as members and is an industry expert with long experience in the Chinese market. Steinford said the move by Ideal Health is part of a trend in the supplement industry. Rather than dealing afar with contract manufacturers, many Chinese companies are setting up shop in the US to manage in real time the production of supplements for export.

“There is a perception of higher standards in US manufacture because consumers in China don’t trust their own dietary supplement supply,” Steinford told NutraIngredients-USA.

Move toward the Internet

Along with the ‘made in USA’ move, Steinford said a number of these companies figure into another trend, the move toward fully online sales. Steinford said he has observed that in Chinese pharmacies, where dietary supplements are supposed to be sold, relatively few products can be found on the shelf. By contrast, direct sales through distributors and online sales are booming.

“These products manufactured here in the US are largely going to Internet type sales,” he said. “When you look at the retail shelves in China you don’t see many vitamins and most of those that are there are manufactured in China.”

Ideal Health is said to be developing an ‘antioxidant spray’ using a grape seed extract sourced from China as well as an ‘algae mist.’ The company is also producing a supplement product targeted at eye health. While spray delivery systems don’t comply with US supplement regulations, the situation is different in China.

Ideal Health’s parent company Ideal Shanghai manufactures dietary supplements and other home health devices and products for Chinese markets.

The company has distribution networks throughout China and and is said to have more than $50 million in annual revenue.

“In China,” Wu said, “our strength is in manufacturing and sales. We do not have as many capabilities as far as developing new formulations and doing the testing like they have here.”