Monthly Archives - February 2021

Vietnam promotes the export of processed agro-forestry-fisheries products-DataVTech

Vietnam promotes export of processed agro-forestry-fisheries products

The project aims at improving the quality and value of agro-exports to meet the regulations of importers.

Around 60% of Vietnam’s agro-forestry-fisheries exports are expected to be processed, significantly contributing to its total growth of 6%-8% annually by 2030, according to the latest plan approved by the Prime Minister.

The project, aiming to promote the export of agricultural, forestry, and fishery products by 2030, sets an export value of around US$60-62 billion, including US$25 billion from major farm produce, US$17 billion from forestry products, and US$15 billion from seafood.

Vietnam's agro-exports strive to earn around US$60-62 billion by 2030. Photo - VGP

Vietnam’s agro-exports strive to earn around US$60-62 billion by 2030. Photo – VGP

Among agricultural exports, about 40% of the products will be national brands and 70% will have traceable origins.

The plan will also improve the quality and value of agricultural exports to meet the regulations of importers, as well as assisting Vietnamese exporters in protecting intellectual property rights,  safeguarding their positions, and brands in the international market.

Positive signs 

In January, export growth increased by 27.1% compared to the same period of last year, according to the Ministry of Agriculture and Rural Development (MARD).

Wood and wooden products achieved good results in terms of value last month despite Covid-19. Photo - Nguyen Thuy

Wood and wooden products achieved good results in terms of value last month despite Covid-19. Photo – Nguyen Thuy

Despite many difficulties caused by Covid-19, most of the main commodity groups such as seafood, wood, and wooden products achieved good results in terms of value last month.

Regarding seafood, the global demand for shrimp is likely to rise, especially in the context of complicated developments relating to the pandemic. Shrimp exports are expected to gain robust growth and reach more than US$4 billion in revenue in 2021 providing that Vietnamese enterprises take full advantage of free trade agreements, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

To promote the export of agricultural products, the MARD in coordination with localities has promoted the issuance of codes for farming areas, associated with geographical indications, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said. The ministry also has planned to change the way of doing business, consumption, and export of key products.

The ministry will coordinate with the Ministry of Industry and Trade, relevant agencies, and enterprises to improve market forecasts and promptly inform localities and enterprises so that they could adopt appropriate production and business plans.

Source: Phi Nhat

Local pharma industry benefits from EU connection

Local pharma sector to benefit from EU connection

Despite lower-than-expected growth, Vietnam’s pharmaceutical market performed better than other global markets in the past 12 months. Magdalena Krakowiak, chairwoman of the International Quality Medicines’ Generic and Biosimilar Sector Committee (IQMED) at the European Chamber of Commerce in Vietnam, writes about 2020 results and future prospects thanks to the EU-Vietnam Free Trade Agreement.

In 2020, Vietnam’s pharmaceutical market grew around 4 percent compared to the previous year. The growth was, however, lower than predicted. But bearing in mind the pandemic, it was still a great result compared to other world markets. While the EU, the United States, and other countries have struggled to find a coherent response to the COVID-19 outbreak, Vietnam’s government took strict measures to stop it effectively.

The industry faced two different types of challenges – reduced procedures due to patients refraining from visiting hospitals as well as logistical challenges due to the reduced flow of goods and workforce. These circumstances supported a digital revolution in the pharmaceutical industry, shifting educational programs for healthcare professionals from offline to online. Foreign experts continued to provide education for Vietnamese healthcare professionals. Most importantly, pharmaceutical businesses could maintain production stability. Companies put in place comprehensive business continuity and risk management plans to avoid a shortage of drugs and deal with the negative global impact on the supply chain.

Despite the unpredictability of the pandemic, the pharmaceutical market in Vietnam is expected to continue growing significantly in terms of both capacity and value. In addition, the EU-Vietnam Free Trade Agreement (EVFTA) has unlocked more opportunities, both for overseas as well as domestic companies.

With the EVFTA in effect, approximately half of EU pharmaceutical imports are now duty-free, with the rest exempted after seven years. Foreign pharmaceutical companies are allowed to establish foreign-invested enterprises to sell pharmaceuticals imported by them to distributors or wholesalers, build their own warehouses, provide information to healthcare practitioners, and do clinical studies and testing.

There are also changes in terms of intellectual property rights brought by the EVFTA. The regulatory data protection has been established for pharmaceutical products for five years and patent protection is extended up to two years (if the approval process takes more than 24 months). The existing clinical trial requirements on ethnicity have been withdrawn due to their lack of compliance with international standards.

Probably the most important benefit of the EVFTA is the controlling mechanism against the protectionism of local governments. As much as we understand the government’s rationale behind the aim of increasing the share of locally-produced pharmaceuticals to 80 percent, one has to remember that Vietnam’s pharma industry still relies on imports, as domestic output can only meet around half of the total demand.

Therefore, our industry still needs more incentives for further investment in Vietnam as well as a stable legal framework.

Foreign pharmaceutical companies bring innovative and traditional medicines in improved application forms – such as pre-filled syringes and sublingual tablets – and other high-quality generics to Vietnam.

This results in the availability of improved additional treatment options for Vietnamese patients and doctors, which leads to additional benefits for healthcare budgets as well as direct and indirect pharmaceutical spending.

Magdalena Krakowiak, chairwoman of the International Quality Medicines’ Generic and Biosimilar Sector Committee (IQMED) at the European Chamber of Commerce in Vietnam

The IQMED Generic and Biosimilar Sector Committee were established in 2016. With the aim of pooling viewpoints and superior practices towards providing solutions for an affordable, high-quality and sustainable supply source for branded generic drugs in Vietnam, the committee has created a platform where issues and solutions can be discussed among like-minded business professionals in the industry. At IQMED, we welcome several legal changes made recently by the Ministry of Health. The situation leading to thousands of pending market authorizations has been temporarily solved after addressing the issue at the top authorities’ level. However, further analysis and potential streamlining of the drug registration policy in Vietnam are required, particularly in avoiding creating new barriers to import.

We see further potential to maximize benefits arising from the EVFTA for all participating countries in three main areas.

Firstly, all EU member states need to be treated equally in the regulations of Vietnam. Secondly, the registration process of medicinal products within the Vietnamese market should be strictly aligned with international standards. And thirdly, to increase patient safety as well as create a sustainable framework for operations, international codes of ethics and business integrity must be applied.

These changes will support Vietnam to become even more sustainable and a desired investment destination for foreign firms with benefits for a flourishing domestic market.

Source: VIR


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Promising figures offering confidence for pharma future

Vietnamese pharmaceutical giants rushed to new business lines in 2020 to create new motivation for growth amid the ongoing pandemic complications, with some changes bringing about better results.

Clearly, in a happy mood, Vu Thi Thuan, chairwoman of the country’s second-largest publicly-traded drugmaker Traphaco JSC, is looking towards a bright future in 2021 on the back of good performance last year.

Traphaco, which boasts three big shareholders in State Capital Investment Corporation (35.67 percent), Magbi Fund Ltd. (24.99 percent), and Super Delta Pte., Ltd. (15.12 percent), will organize a conference in the next few days to review 2020 operations and discuss the targets for this year.

“The pharmaceutical market has been affected by COVID-19. However, we made encouraging results thanks to having the right strategy,” Thuan told VIR.

promising-figures-offering-confidence-for-pharma-future-in-Vietnam

New tactics

Last year marked a hard 12 months for businesses, and Vietnamese-run pharma firms were not an exception, although the impacts on them have turned out to be less serious than in other sectors.

Faults in the global ingredient supply chain and lower purchasing power have prompted Vietnamese drugmakers to make changes to business plans to shelter from the storm and maintain growth.

Nguyen Vu Cuong, an analyst at brokerage and investment advisory firm FPT Securities, told VIR, “Some players in the pharma industry obtained improvements in operations in the last months of last year, while some others saw no growth, but no falls either. Improvements are mainly attributed to effective cuts in intermediary costs and the launch of new products and strategies.”

For instance, while focusing on the over-the-counter (OTC) market Traphaco also started to venture into the $3-billion beverage market last summer with a new product – herbal tea Traphaco Boganic, which was included in its revenue structure in the third quarter.

Le Trung Thanh, former general director of Pepsi Vietnam, said that in the local lucrative beverage market, players tend to create specific and unique products to gain an advantage. The market has many kinds of drinks, but not so many healthy ones.

“Healthy products are very popular in the US, the EU, Japan, and South Korea,” Thanh noted. “This is a courageous move from Traphaco because obviously drugs and beverages are not the same things.”

A new bold step into the beverage market illustrates the challenge Traphaco has to attain new successes amid growing competition. Despite being a leading brand in the local pharma industry, making up nearly 50 percent of the market share of liver-tonic products, for example, the group has not achieved better growth as it did in the past, despite having taken a number of major decisions.

Encouraging results came when Traphaco reported total revenues of over VND1.3 trillion ($56.52 million) and after-tax profit of VND141 billion ($6.13 million) in the first nine months of 2020, up 12 and 31 percent on the year, respectively – a strong performance in comparison with a fall of about 10 percent among other listed drugmakers.

Elsewhere, Hau Giang Pharmaceutical JSC (DHG), the biggest domestic publicly-traded drugmaker, has trended towards the ethical drugs channel (ETC), or the hospital channel, and increased capacity for exports. The company has restructured its product portfolio towards focusing on investment in high-quality drugs meeting JAPAN-GMP and PICS-GMP standards.

DHG decided to pour $40 million in a GMP factory in the Mekong Delta province of An Giang, with the target to put it into operation in 2023. Also last year, DHG got the JAPAN-GMP certificate for its two assemblies. Drugs meeting JAPAN-GMP, PIC/S-GMP, EU-GMP, CGMP-USA certificates are among the prioritized drug tenders for the hospital channel.

With the move, DHG showed off its ambition to conquer the strict Japanese market and some ASEAN member countries where subsidiaries of Taisho Pharmaceutical Holdings have a presence. Taisho, one of the five biggest pharmaceuticals in Japan, is a major foreign shareholder of DHG, with a take of 50.78 percent.

Imexpharm Pharmaceutical JSC, Vietnam’s fourth-biggest pharma firm, has a similar focus on the ETC segment. The drugmaker has made investments to gain an EU-GMP certificate for its factories to gain advantages in drug tenders. During the past year, it also restructured its product portfolio, concentrating on EU-GMP drugs.

Notably, Imexpharm gained market authorization from Spain for its Cephalexin 500mg capsules produced at its EU-GMP factory located in the southern province of Binh Duong.

To serve the future strategy, a resolution from Imexpharm’s board of directors was issued on January 5 approving a loan of $8 million from the Asian Development Bank. At present, Imexpharm’s foreign ownership limit currently remains set at 49 percent, with Balestrand Ltd. (5.92 percent), and KWE Beteiligungen AG (14.26 percent) as foreign shareholders.

Like Traphaco, Imexpharm, and DHG, OPC Pharmaceutical JSC – one of the biggest domestic pharma firms – and others had to make adjustments in their business strategy during the last year. OPC also suffered from interruptions in the global ingredient supply chain, although it has growing areas to supply for itself.

At present, Vietnam’s pharmaceutical production relies much on imported ingredients which make up 80-90 percent of local demands, with which China and India account for over 80 percent.

OPC focuses on expanding functional food by investing in product assembly while increasing the production of alcohol-related products and others to satisfy growing demands due to the pandemic. Moreover, the company continued to strengthen the ETC channel as well as develop in the OTC market.

As noted in documents from OPC’s annual general shareholder meeting last June, some new businesses were added, including functional food, cosmetics, import and export of pharmaceuticals and ingredients, and automobile cargo transportation business.

Good performance

With year-end reviews and financial statements imminent, results for these pharma firms are just around the corner. According to a source from TRA, the group is estimated to see an on-year increase of 11 percent in revenues by the end-2020. Its profit is also estimated to rise at the same rate, reaching VND200 billion ($8.7 million).

While reporting a fall in the ETC market, Traphaco gained a 17 percent on-year improvement in OTC.

“We aim to have consolidated revenue ascended by 9 percent in 2021, with the OTC to be the key channel, and ETC to rise 10 percent,” Thuan told VIR.

With the change in business strategy, DHG’s net revenues just slightly fell by 2.8 percent on-year in the first three quarters of 2020, while after-tax profit rose 24 percent, fulfilling the annual targets. It is said to meet the 2020 targets.

Having been reporting better performance after the mid-year peak of COVID-19 in Vietnam, Imexpharm saw net revenues and profit rise 0.8 and 17.8 percent in the first 11 months, respectively. Its ETC revenues jumped 40 percent on-year, while OTC is on the road to recovery despite negative growth of 10 percent.

Market watchers attributed Imexpharm’s higher profit growth to better performance of cost-saving, with selling and management expenses cutting by 8.6 and 5.4 percent, respectively. With this momentum, Imexpharm is one of the giant’s forecasts to report growth in its results.

According to Fitch Solutions, revenues of Vietnam’s pharma industry were estimated at $6.5 billion in 2019. The Drug Administration of Vietnam forecast promising double-digit growth for the industry over the next five years, with the total value to reach $7.7 billion in 2021 and a likely rise to $16.1 billion in 2026.

In the wake of growth potential, multinational corporations are expanding towards and within the local market – a trend that should be further intensified on the back of the EU-Vietnam Free Trade Agreement. This will create more pressure on the domestic players, urging them to make new changes to stand firm and spur growth.

Source: Bich Thuy


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