Business

Foreign investors eye Vietnam’s pharmaceutical industry

Foreign investors have set their eyes on Vietnam’s pharmaceutical industry because of its rapid growth within the past ten years ranking 13th in the world in term of growth speed.

Foreign investors eye Vietnam’s pharmaceutical industry

In 2017, the pharmaceutical industry's import value topped $2.8 billion increasing 10.1 percent compared to 2016 and approximated $3 billion in 2018.
According to economists, the industry has potential to develop in 2019 and the next few years.
According to the Vietnam Chamber of Commerce and Industry (VCCI), from 2010 till now, the industry has seen growth and posted double-digit earnings growth. It is forecast that the industry will continue maintaining its growth rate to 2022.
Nevertheless, the industry has met 52.5 percent of demand while the remaining must be imported.
At present, 180 Vietnamese pharmaceutical firms including local and foreign direct investment (FDI). Of these 194 plants under 158 firms achieve GMP- WHO standard.
However, firms just manufacture simple medicine and generic drugs, a pharmaceutical drug that has the same chemical substance as the drug that was originally developed, patented and innovated, for local need or to do outwork for foreign companies.
Everagely, the country consumes around 60,000 tons of different pharmaceutical materials and more than 80 percent of materials are imported mainly from China and India.
Currently, when Vietnam integrates with global economies, stronger M&A trend between pharmaceutical local and foreign companies will take place both in production and distribution.
For instance, the US-based Abbott possesses 51.7 percent of shares of Domesco company and owns Glomed Pharmaceutical Company. Japanese Taisho Pharmaceutial has increased share ownership ratio at Hau Giang Pharmaceutical Company to 34.3 percent.
Chairman of the Indian Business Chamber in Vietnam (Incham) Ramesh Anand, said that Indian firms have paid more attention to investment and business in Vietnam, a potential market and a bridge to get access to the whole East Asia.
As Vietnamese people have higher income, they require high quality healthcare. Additionally, the country is an attractive destination for medical tourism with mushrooming healthcare institutions for serving overseas customers.
Accordingly, Vietnam is an important market for herb and traditional Indian medicine.
India has considered Vietnam as a vital and potential market in term of medical equipment and medicine.
Economists also said that the pharmaceutical industry is expected to leap by 10-15 percent in the next few years and post revenue of $7.3 billion in 2019.
On one side, M&A trend helps Vietnamese entrepreneurs to mprove business management ,  expand shares and develop distribution networks. On the other side, it has legal risk triggering lawsuits. Therefore, enterprises should find information of their partners and understand contract terms clearly to avoid problems later.

By MINH HAI - Translated by UYEN PHUONG

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