Recruiting in China

Baxter International Inc. will be stepping up its investments in China, hiring an additional 200 workers a year as part of a larger strategy to increase its international business, the company told analysts recently.

Baxter generated 56 percent of its sales from international operations last year.

Baxter's international sales increased by 6 percent last year, to $5.8 billion. The firm's total sales were nearly $10.4 billion.

The company also has more employees outside the U.S. Currently, about 1,500 of Baxter's global workforce of 45,000 are in China.

Baxter has 18,500 workers in the U.S.

Baxter is not a traditional pharmaceutical company that makes pills and tablets. Rather, it makes money on medication delivery devices, genetically engineered blood therapies and dialysis medicines.

The emphasis on China did not get as much attention as Baxter's overall plans announced last week to increase spending on research and development and to give consideration to acquiring companies in the $100 million to $500 million range.

However, many analysts have taken note of Baxter's international plans in notes they have written in the week following the March 14 analyst meeting.

In particular, Baxter sees China as a growth market because dialysis rates are low, particularly for peritoneal dialysis, a form of in-home therapy.

Baxter, which sells intravenous systems, also sees a huge opportunity in medication delivery.

China is a country that still has hospitals that make use of glass bottles as containers for solutions and medications, instead of the plastic bags commonplace in U.S. health facilities.

"The company is investing in new low-cost products, clinical studies and marketing activities to position itself for faster growth in these countries as they come to appreciate the benefits of home dialysis," said Ben Andrew, an analyst with William Blair & Co. of Chicago in a report he issued last Friday, two days after the Baxter analyst meeting.

The Deerfield-based medical products giant sees markets such as China, where per-capita spending is growing 10 percent or more annually, as critical to achieving a sales growth rate of 7 percent to 9 percent over the next five years.

John Greisch, corporate vice president and president of Baxter's international operations, said fast-growing economies such as China's are also expanding health insurance coverage of their citizens and increasing reimbursement to providers of medical care.

By comparison, the number of uninsured in the U.S. is rising while increasing numbers of workers are paying more out of pocket for their health benefits.

Baxter's sales from China were about $150 million last year.

The company expects them to grow about 25 percent a year and approach $500 million annually by 2011.