Vietnam's pharmaceutical industry is changing, the mark of SCIC capital flow

Vietnam's pharmaceutical industry is making strong strides, in which SCIC-funded enterprises contribute bright colors to this colorful picture.

Searching for the blue ocean

After achieving the leading position in the field of oriental medicine, with the support of major shareholders including SCIC and Daewoong (Korea), Traphaco JSC has embarked on restructuring with a new strategy "Maintaining the No. 1 position in oriental medicine - investing in developing high-quality modern medicine".

The company focuses on renewing existing oriental medicine product lines, launching high-end products that both increase efficiency and increase product value. The strong growth in sales of this group in 2023 has proven that high-quality product lines have a solid position in the market.

For modern medicine, Traphaco and Daewoong have carried out 8 stages of technology transfer with about 70 products, belonging to the drug groups with the largest market capacity in Vietnam such as diabetes treatment, liver and bile, blood pressure... Up to now, there have been 29 products receiving technology transfer at different stages from research, registration to market deployment.

Traphaco 2024 Shareholders' Meeting.

The success of this strategy is reflected in the outstanding growth figures. In 2023, Traphaco launched 13 new products, with sales exceeding the plan by 19%. Traphaco's non-traditional medicine group sales grew by more than 48% in the 2021-2023 period.

At Hau Giang Pharmaceutical, according to Mr. Doan Dinh Duy Khuong, Member of the Board of Directors and Chief Operating Officer (COO), the Company always prioritizes investment in research on new products. DHG has invested in machinery and standardized production lines to EU/Japan-GMP to improve the quality of drugs for domestic consumers and export to demanding markets.

Hau Giang Pharmaceutical's distribution network is deeply and widely developed through Pharmacy, Hospital, and modern channels with about 34 branches nationwide, exporting products to 16 countries.

For two consecutive years 2022-2023, Hau Giang Pharmaceutical maintained its position in the group of enterprises with trillion-dollar profits, reaching 1,100 billion VND and 1,159 billion VND respectively.

Working session between SCIC, Vinapharm and strategic partner Sanofi

A new wind also blew strongly to Vinapharm, a company that currently has capital contributions in 23 member companies.

In 2023, Vinapharm and its subsidiaries will proactively seek and cooperate with partners in developed countries to promote the distribution of new, high-quality products in Vietnam.

Specifically, Vinapharm signed two Memorandums of Understanding with partners in the biopharmaceutical sector in the United States. CPC1 (a subsidiary of Vinapharm) signed a Memorandum of Understanding with two Russian partners on the distribution of drugs for the treatment of diabetes and cancer, and cooperation with AriBio (Korea) - one of the companies developing products in the field of biotechnology with outstanding technological achievements globally, on business, marketing and distribution of products in Vietnam after being licensed for circulation by the Vietnamese Ministry of Health.

Promoting agility, dynamism and drastic innovation has brought outstanding business performance to Vinapharm. In 2023, Vinapharm achieved VND 5,868.2 billion in consolidated revenue, pre-tax profit reached VND 425 billion, equal to 103.5% and 322.2% compared to 2022.

Vision drives change

What these companies have in common is decades of experience and a deep understanding of the industry. However, past glory can become a limitation that causes inertia if the company is afraid to innovate. Especially when change takes a long time to bear fruit, requiring the support of shareholders.

According to Ms. Dao Thuy Ha, Deputy General Director of Traphaco, the enterprise has the support of major shareholders when implementing the new strategy. In particular, SCIC always identifies Traphaco as an enterprise invested in for sustainable and long-term development. State shareholders accompany and support Traphaco through capital representatives who directly participate in governance, operations, and participate in the process of planning long-term and medium-term development strategies, especially the new restructuring strategy with many breakthrough changes, helping the enterprise promote traditional values, while making changes suitable for the market.

Mr. Doan Dinh Duy Khuong also believes that SCIC's participation in enterprises is very important, balancing the roles of foreign partners and the state in enterprises, participating in building long-term strategies for enterprises, improving management efficiency, thereby helping to develop the Vietnamese healthcare industry to become more and more developed and perfect.

The fact that enterprises such as Hau Giang Pharmaceutical, Traphaco or companies with Vinapharm's capital are investing heavily in R&D is an encouraging trend in the Vietnamese pharmaceutical industry, expected to bring many quality healthcare products and solutions to domestic people and for export. However, this is not a simple game, requiring large investment capital and taking a long time to complete, especially for complex projects. Therefore, shareholders must have a long-term vision to promote and support the executive board at enterprises.

Currently, SCIC is holding direct/indirect capital in prestigious pharmaceutical companies in the Vietnamese market (Vinapharm, Hau Giang Pharmaceutical, Sanofi, Traphaco, Imexpharm, Domesco, etc.). Ms. Han Thi Khanh Vinh, General Director of Vinapharm, expects that, as a government investor, SCIC will have recommendations and proposals for management agencies to continue to improve the institutions and laws on production, trading, supply and distribution of pharmaceuticals. For example, shortening the time limit for granting, extending or changing, supplementing the Certificate of Circulation Registration of drugs, pharmaceutical ingredients, etc.

Sweet fruit for stakeholders

At the 2024 annual general meeting of shareholders of the above three enterprises, domestic and foreign shareholders all had very positive assessments. In addition to improved core competitiveness, increased employee salaries and bonuses, and increased dividends paid to shareholders. Specifically, at Hau Giang Pharmaceutical, the cash dividend payment rate for 2023 is up to 75%, at Traphaco is 40%, and at Vinapharm is 7%.

Thus, state shareholders not only receive additional dividends, but the trend movements at the above enterprises are contributing to increasing the value of corporate stocks and increasing the value of state capital that SCIC is managing.

“A pharmaceutical company’s competitiveness is not much different from its Research and Development capabilities. To do this, we are willing to support the company in every possible way,” the message that Mr. Chung Ji Kwang, Chairman of Traphaco, shared at the Company’s 2024 annual general meeting of shareholders affirmed the unity and consistent vision of shareholders to promote the strong and sustainable development of the enterprise. This is also the goal that SCIC always focuses on implementing in enterprises with capital contributions from the Corporation.

Source: https://baodautu.vn/nganh-duoc-viet-nam-chuyen-minh-dau-an-dong-von-scic-d215953.html