VietNamNet Bridge – FPT Retail, the digital device retailer, The Gioi Di Dong, the biggest smartphone distributor, and Vingroup, the real estate developer and retailer, all have spent big money to set up their drug retail and manufacturing chains.
Retailers rush to expand drug distribution chains
The Gioi Di Dong in late 2017 took over Phuc An Khang drug store chain, officially joining the drug distribution market.
At the same time, FPT Retail took a step to expand its business ecosystem by investing in Long Chau drug store in HCM City.
Most recently, Vingroup announced the establishment of Vinfa, a subsidiary pharmaceutical and kicked off a project on setting up Vinfa Medicinal Drug R&D center, with investment capital of VND2.2 trillion.
The center, once operational, will develop and trade high-quality Eastern and Western medicine for domestic consumption and export.
According to Rong Viet Securities, Vietnamese pharmaceuticals have to import up to 90 percent of materials needed to make medicine, and their products hold only half of the market.
Meanwhile, the potential of the medicine industry is great with a predicted spending level of $55 per head per annum by 2021. Euromonitor International believes that stable growth rate of 10-15 percent will be maintained in the upcoming years, reaching $7.3 billion in value by 2019.
Vietnamese pharmaceuticals have to import up to 90 percent of materials needed to make medicine, and their products hold only half of the market.
The drug demand is attributed to the longer life expectancy as well as increased rates of respiratory diseases, cancer, diabetes and obesity.
The amended Pharmaceutical Law taking effect on January 1, 2017 paves the way for drug trading activities and encourages Vietnamese companies to expand production to meet 80 percent of domestic demand by 2020.
The law offers preferences in drug manufacturing, drug materials, essential drugs, specialized products, and vaccines. It also encourages the improvement of the distribution network.
According to VIRAC, a consultancy firm, Vietnam cannot control input materials for drug manufacturing because of high investments needed for technology and R&D.
There are only 130 pharmaceutical firms which make drugs meeting GMP standards, a small figure compared with the high healthcare demand from 94 million Vietnamese.
Vietnam puts high hopes on foreign invested expanded projects and newly registered projects, either under the mode of FDI (foreign direct invetsment) or through M&A as the impetus to improve low production.
Singapore now ranks third among foreign investors in Vietnam. The expanded investment project registered by OPV, located in Bien Hoa 2 IZ in Dong Nai province alone, was capitalized at $47.7 million, accounting for 7.3 percent of the investor’s total capital registered in March.
- A letter to the investing class of 2020
- UPDATE 2-Mike Ashley's Frasers bucks UK retail gloom with growth forecast
- This market mayhem will test Robinhood's newbie investors
- Will Nifty breach 12,000 in the coming week? 8 market experts share their views
- Market may be heading to record high; brokerages bet on these 8 blue-chip stocks
- Moneycontrol Poll: 65-66% respondents want to invest in US equities as brokerages offer platforms
- RIL doubles wealth since March; brokerages see further upside post Future Retail deal
- Banks in bonus balancing act as economies shrink but markets boom
- Investment firm Vanguard is leaving Hong Kong to focus on mainland China boom
- Vietnam real estate market on steady foundations
- Juul to lay off more workers, considers exiting some international markets
- Trade Spotlight: ICICI Bank, Sun Pharma, and Future Retail in focus
- RPT-ANALYSIS-U.S. big tech dominates stock market after monster rally, leaving investors on edge
- These 6 simple steps will help you grow your equity investment
- Experiential sports marketing: ‘Home as a new playground’
- Knowing the Investment Ratios
- Stock market upturn results in positive growth for Vietnam’s investment funds
- Profit taking to weigh on local market, but September may be bright
Retailers rush to invest in drug distribution market have 624 words, post on english.vietnamnet.vn at April 15, 2018. This is cached page on Auto News. If you want remove this page, please contact us.