VietNamNet
Bridge – Under the current laws, foreign
companies do not have the right to directly distribute pharmaceutical products
in Vietnam. However, foreign investors still can see special investment
opportunities in the Vietnamese market.
Analysts
have said that foreign pharmaceutical companies have been continuously
increasing their share ownership ratios in domestic companies over the last two
years.
Chilean
CFR International SPA Group has recently become the strategic shareholder of
Domesco (DMC) and the biggest shareholder of DMC with 44 percent of stakes and
three members in the board of directors of DMC.
CFR’s
General Director Alejandro Weinstein said on Dau tu that the DMC deal would
help expand its presence in the rapidly growing markets, while this would allow
to take full advantage of the existing DMC’s distribution and supply networks.
In return, CFR’s experiences would help DMC upgrade its investment efficiency
and corporate governance. Especially, CFR would help DMC’s products penetrate
the South East Asian, Chilean and South American markets.
Prior
to that, in February 2012, Vietnam Azalea Fund Limited publicly offered to
purchase 1.24 million shares of Traphaco in an effort to raise its ownership
ratio to 35 percent.
2011
was the year which witnessed a lot of stake transfer deals in the healthcare
and pharmacy sector. Dutch Stada Service Holding B.V, a subsidiary of German
Stada, for example, got 25.29 percent of stakes of Pymepharco, the company
specializing in producing and trading medicine products, from Thailand-based
Wellite International Limited.
With
the deal, Stada Service Holding now holds 49 percent of the chartered capital
of Pymepharco.
The
Vietnamese pharmaceutical market proves to be one of the most potentials
markets in the world. According to the Ministry of Health’s Drug Management
Agency, Vietnam is one of the nations which import the highest volumes of
medicine. The Vietnamese market has been witnessing very rapid growth rates in
recent years, about 25 percent per annum on average.
Though
the growth rate is lower than the rates of enterprises in other production and
service sectors, pharmacy remains an attractive investment field. This has been
explained by the fact that this is a low-risk production field which does not
bear influences from economic crisis.
Analysts
have also predicted that as the living standards have been increasing,
Vietnamese people tend to spend more money on healthcare. Especially, the
demand for the medicine made of herbs that help improve the health, has been
much in demand.
Robert
Tran, General Director of Robenny in Asia, a Canadian consultancy firm, also
thinks that pharmacy is the business field that can bring super-profits. In
Vietnam, the medicine market proves to be more bustling than other countries in
the world, because of the loosened regulations on medicine management.
Vietnamese people can buy medicine easily, even without physicians’
prescriptions, at drug stores.
The
Drug Management Agency itself has also been encouraging foreign pharmacy companies
to buy stakes of Vietnamese companies and take full advantage of the products
and the distribution networks of the partners in the companies.
Under
Vietnam’s commitments when admitting into the World Trade Organization (WTO) on
the opening of the Vietnamese market to medicine products since January 1,
2009, foreign direct invested enterprises do not have the right to distribute
drugs in Vietnam.
However,
despite the regulation, foreign firms still can find the way to make profits in
Vietnam.
In many
cases, the stake transfer to foreign investors was not the desire of Vietnamese
companies. However, the transfer proves to be unavoidable. Mekophar is an
example. In October 2010, after Mekophar listed its shares on the bourse, the
shares were collected by foreigners who had held 4.7 percent of Mekophar’s
chartered capital by April 18, 2011. Therefore, Mekophar now cannot distribute
medicine, join the bids to provide medicine to hospitals and meet some other
problems.
Source:
TBKTSG
Business & Investment Opportunities
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