Traphaco has grown into the second largest pharmaceutical firm in
Vietnam with a sharp network expansion and core business strategy.
According to its annual report
released in January, Traphaco achieved VND116 billion ($5.5 million) in net
profit, representing 31 per cent year-on-year growth. During 2012, Traphaco
opened four branches and acquired two provincial distributors, bringing its
network of distribution branches and subsidiaries to 18 nationwide.
This represents outstanding
growth as Traphaco had only two branches in 2009. The net profit growth in the
last three years was particularly impressive at almost 32 per cent per annum.
The revenue and net profit annual growth rates were 21 and 25 per cent,
respectively over the last five years.
Since then it has outperformed
its peers in terms of revenue and net profit growth to become the second
largest manufacturer in Vietnam, from the fifth in 2007. Last year, was the
second consecutive year that Traphaco boasted the highest net profit growth
rate among listed pharmaceutical companies.
Traphaco already has a strong
foundation for future sustainable growth, with a large farming area of herbal
plants, an award winning R&D team, two GMP-WHO certified manufacturing
facilities, a nationally-recognised brand and a nationwide distribution network
of 18 branches.
Given the strong growth over past
year and a solid foundation, the company also set ambitious targets for 2013.
Accordingly, revenue is targeted to reach VND1,800 billion ($86.5 million), a
27.8 per cent jump in comparison with 2012 and the net profit is expected to
come to VND147 billion ($7 million), up 26.7 per cent year-on-year.
Chris Freund, managing director
at Mekong Capital - a stakeholder in Traphaco, said Traphaco reached
significant achievements over the past years because its strategy was very
focused on its core pharmaceutical business and emphasizes vertical
integration.
“It is very careful about how its
allocates its capital and its proposals for new investment are a good fit with
its strategy. For example, expanding its distribution network, expanding
manufacturing capacity, completing the acquisition of subsidiary Traphaco CNC
and investing in the farming of raw materials,” said Freund.
To further expand business,
Traphaco is going to partner with a Japanese company. In January, the
management team at Traphaco held a series of working sessions with a leading
Japanese generic medicine manufacturer with almost $800 million in sales in
2012, to explore cooperation opportunities. This company is one of three Japanese
strategic players who are in different stages of discussions with Traphaco,
with the intention to become partners with Traphaco for either exclusive
distribution or production joint venture.
But the company will not stop
there. This year, Traphaco is looking for merger and acquisition opportunities
to expand its network in the market.
“Given the success of M&A
transactions with two companies CNC and Daklak Pharmaceutical Company, we
believe Traphaco has enough ability to acquire other companies in future. That
why we encourage the company to continue looking for new M&A
opportunities,” said Freund.
However, there is other factor
behind the success of Traphaco. That is the company has two competent leaders,
chairwoman Bui Thi Thuan and director Tran Tuc Ma.
“Thuan and Ma led the creation of
a clear vision for Traphaco and a clear series of annual milestones for
achieving that vision. This has contributed to a more rapid rate of growth than
other companies that don’t have such a clear vision or business plan,” said
Freund.
vir.com.vn
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