Investment Opportunities with Sohaco

The Vietnamese pharmaceutical market is bustling with an annual growth rate of 15 per cent on average. The total turnover of the pharmaceutical industry valued at US$391 million in 2000, at US$817 million in 2005, at US$1.136 billion in 2007, at estimated US$1.26 billion in 2008 and at expected US$1.67 billion in 2010.

 

Despite the industrial sales value of US$1.136 billion in 2007, spending per capita on medicines was only US$11 plus a year, much lower than regional rate of US$20. To reach the regional level of US$20 per capita a year, with a population of 84 million people, the sales value should have been US$1.68 billion, or a 1.5-time increase over the result in 2007.

 

According to the statistics from the Ministry of Health, in 2007, domestic production accounted for only 53 per cent, or US$600 million, of the total sales while imported products made up 47 per cent. Therefore, domestic production must make up for 55 per cent in 2008 and 60 per cent in 2010. Thus, if the production value totalled some US$600 million in 2007, the figure should be US$1 billion in 2010 (60 per cent of the total sales) and some US$1.5 billion in 2012 (70 per cent). It means that the domestic production in 2012 must increase 2.5 times over that in 2007. As a result, the opportunity for development of the Vietnamese pharmaceutical industry is very high.

 

With an area of 50,000 square metres, Sohaco Trading and Pharmaceutical Group Joint Stock Company plans to build five production workshops; namely the Workshop 1: non - blactam pills, Workshop 2: blactam pills, Workshop 3: injectable drug and transmissible fluid, Workshop 4: herbal medicines and Workshop 5: functional foods. The factory will be completely new, with advanced equipment and technology meeting current quality standards like the good manufacturing practice (GMP) of the World Health Organisation (WHO) and the European Union (EU). With favourable location along Lang - Hoa Lac Expressway and near central institutes, universities and research centres, the company sees great advantage in conducting researches and developing new products. Sohaco is also easy to recruit expected technicians and managers because it is near one of the country’s largest training centres, Hanoi (about 27 km from the downtown). Sohaco also has hundreds of agents and a strong and complete distribution network throughout the nation; therefore, the supply of materials and the sale of products in Vietnam and for other nations are quite easy. With a total investment capital of US$15 million, Sohaco expects to kick off the construction on the project in 2009 and complete the first workshop in 2010 and the last in 2012. Because the project is located in the Hoa Lac Hi-tech Park, it enjoys more investment incentives from the State than other industrial zones.

 

Sohaco is harbouring an ambition of the most modern pharmaceutical factory in Vietnam to serve the local demand and export markets. Hence, Sohaco gives the top priority to cooperation with foreign partners from developed pharmaceutical industries, with strong capacities of finance, technology, equipment and governance. The company provides a wide range of cooperation modes like joint venture, technology transfer, franchising and original equipment manufacturing. Sohaco wishes to cooperate with domestic and foreign partners from developed pharmacy industries.