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SHANGHAI, China, Oct. 16, 2003 – Staying healthy depends on regular exercise and good nutrition, but Shen Guojun, the 60-year old president of Shanghai Stone Nano Technology Port, Ltd., admits he relies less on exercise and more on nutrition.
The tendency is understandable, since his research into selenium (Se) has focused his attention on the vitamins and minerals that the human body needs to function well, and the deficiencies our environment and diet make almost certain.
Selenium was one of the last essential minerals to be discovered in the human body. Selenium deficiency is considered a relatively recent problem, but a widespread one, says Dr. Zhang Jinsong. The professor at China’s well regarded University of Science and Technology (USTC) cites several reasons — including the fact that 72 percent of the earth lacks adequate selenium deposits, food loses much of its nutritional value through processing, and pollution hinders the body’s absorption of the mineral.
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Researchers soon discovered, however, that finding a commercial version of the mineral was nearly impossible. Although there are nearly 2000 types of selenium in the world, each with a slightly different use, they are all highly toxic. USTC, however, used nanotechnology to develop a type of selenium that is effective and has a low toxicity—nanoSe. The university still owns nanoSe and continues to do research on it, but it sold an exclusive product license to Stone Nano Port. Unlike other nanoproducts, “you can’t separate the nano from the Se,” says Shen proudly, “our product is nothing without nanotechnology.”
Stone Nano Port launched in May 2001 to a lot of fanfare touting its initial capital investment of 1.8 billion yuan (U.S. $217 million), mainly from a Hong Kong venture, and its prediction that it would be profitable by 2005. As of today, “we are a little ahead of schedule,” says Shen.
Currently, its product, Xiwang, is sold only in Shanghai. Introduced a year ago, Xiwang is stocked as a product in all the city’s major pharmacies. With a price tag just raised nearly 30 percent to 168 RMB (U.S. $20) per bottle, it is one of the most expensive vitamin pills on shelves. According to a report by the Shanghai government, the average amount spent on health supplements per resident annually is only 232 RMB.
Although the company eventually hopes to turn selenium into an everyday product, “we know we still have to consider ourselves a high tech company,” says Shen. The difficulty is two-pronged. People don’t understand selenium, and they understand nano selenium even less.
Most clerks selling Xiwang in the pharmacies think nano means “super,” or is a brand name like Esprit. Says the marketing manager at K-max, another health supplement manufacturer, “emphasizing technology is only effective if the health benefits of a certain product, like garlic or calcium, is common knowledge.” Customers tend to be “suspicious” of new treatments.
So for Xiwang, and selenium, to gain legitimacy, the company has to encourage medical recognition of the product. During the SARS outbreak, Stone Nano Port donated Xiwang to hospitals to help patients boost their immune systems. Its use in hospitals is important because “our first targets are doctors, who understand selenium,” says general manager Joffree Yu enthusiastically. “People have to try it first, and then tell their friends.”
The line between medicine and health supplements is less distinct in China than in the United States. After a few fiascos involving false advertising, in 1997 the Chinese government started mandating that herbal supplements and others of that ilk require government certification before they could be sold to the public. The same government bureau, SFDA, controls medicine and supplements.
This connection is important because Stone Nano Port plans to develop a series of nanoSe-related products in the near future with USTC, including medicine. They are currently testing products that use a mix of nanoSe and other chemicals to treat diabetes, liver problems, cancer, and perhaps cure the common cold.
Xiwang, and selenium in general, face stiff market competition. Because of toxicity problems, China’s two other selenium manufacturers aren’t much competition. Other health supplement manufacturers are. In 2002 there were 81 companies in Shanghai that manufacture vitamin pills and related products, all competing for a citywide market worth about U.S. $ 2.2 billion.
An encouraging discovery for Stone Nano Port is that scientific studies of Chinese traditional medicine reveal that many of the herbs used, including ginseng, contain relatively large amounts of selenium. The domestic market might be expected to respond to the fact. Internationally, marketing may be easier because the importance of selenium to overall health is more common knowledge.
For now the 15 employees at Shanghai Stone Nano Technology Port have enough to do with just the Shanghai market. “This product will heat up soon,” assures Shen, “but we have to go carefully, step by step.”