In the past two years, foreign pharmaceutical
firms have increased their holdings in local enterprises.
Lately,
the Chile-based CFR International SPA Group has become the strategic
shareholder of Domesco Pharmaceutical and Medical Instrument Export-Import
Joint Stock Co (coded DMC). That group has kept over 44 percent of the local
firm's total stake so far.
Alejandro
Weinstein, CFR's general director stated that the trade deal with Domesco would
help his group to expand its presence in the developed markets, making full use
of the local company's production and distribution network. In exchange, the
group would share with DMC the group's trading experience and technologies in
pharmaceutical industry to improve Domesco's investment effectiveness and
management.
Especially,
CFR would help introduce Domesco's products in the Southeast Asian markets,
Chile and South America's.
Previously,
in February, Vietnam Azalea Fund Limited had offered to buy 1.24 million shares
in Traphaco Pharmaceutical Joint Stock Co in order to raise its holdings to 35
percent.
Vietnam
has potential pharmaceutical markets. According to statistics released by
Pharmaceutical Controlling Department, under Ministry of Health, Vietnam was
one of the largest importers of pharmaceutical products in the world with
average pharmaceutical market growth rates of 25 percent per year.
The
department has encouraged foreign pharmaceutical firms to purchase shares in
local firms, as well as taking the advantage of products and distribution
networks of each other.
According
to the commitments for joining the World Trade Organisation (WTO) about opening
markets for pharmaceutical industry, starting from January 1, 2009,
foreign-invested companies could not distribute products in Vietnam. However,
foreign pharmaceutical enterprises have still considered Vietnam's markets as
the special investment opportunities to bring them profit.
Let's
take the case of Mekophar Pharmaceutical and Chemical Joint Stock Co as an
example.
In
October 2010, after the company listed shares on the market, the foreign
investors have purchased in the company's shares. Up to April 18, 2011, the
foreign investor had kept 4.7 percent of Mekophar's chartered capital,
equivalent to 4.33 billion dong. That was the reason why Mekophar was not
allowed to supplement the business lines of trading pharmaceutical products in
the market because the company has become the foreign-invested one already.
The
company cannot register for trading pharmaceutical products, joining the
bidding sections for providing medicines in the hospitals as well as opening
new pharmaceutical agents.
Recently,
the prime minister has assigned the ministry of health to make surveys and
conclusions about the commitments with WTO, especially in the content relating
to not allowing the foreign-invested companies to open new distribution network
in local market so as to make appropriate amendments. The ministry of health
should make report to the prime minister before July 31, 2012.
VietBiz24
Business & Investment Opportunities
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