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Vietnam a Huge Business Opportunity for India

Vietnam a Huge Business Opportunity for India

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'Vietnam a huge business opportunity for India

Mumbai, Oct 13 (IANS) Inviting Indian business and technical expertise in various sectors, Vietnamese President Truong Tan Sang Thursday said the demand for material and machinery is high in his country and that there is a huge potential for Indian businesses in Southeast Asia's fastest growing economy. Truong invited Indian expertise in sectors like healthcare, oil and gas, manufacturing, agroindustry, pharmaceuticals, automotive, IT, shipping and ports, electrical consumer appliances, education and road infrastructure. 'The demand for material and machinery is very high with a huge export potential for you. Indian businesses need to learn more about the situation in Vietnam so they can profit from it,' he said while speaking at a business forum. Organised by the Confederation of Indian Industry (CII), the Vietnam-India Business Forum was attended by captains of industry of both the nations who gathered to discuss mutually beneficial business partnerships. 'Beginning 2010, Vietnam has implemented a 10-year-long modernization policy which has thrown open the need for products and services worth hundreds of millions of dollars. India with a long-standing expertise in almost every one of those field, can take advantage of the same,' Truong said. At the same time, he also stressed on the urgent need for information exchange between the two countries. Stressing on Vietnam's emphasis on development that led to business friendly policies like a reduction of corporate tax, greater freedom to private enterprise, emphasis on exports, production of consumer goods and encouragement to foreign investments, the president called upon Indian companies to avail the preferential policies of his government to promote investment in his country. Farhad Forbes, past chairman, CII (Western Region) and Director Forbes Marshall, put the IndiaVietnamese business ties into statistical perspective. 'Bilateral trade with Vietnam stands at close to $4 billion, ten times more than what it was in 2000. Vietnam's exports to India crossed $1 billion in 2010-11, a jump of 92 percent over the previous year and India's exports to Vietnam also increased to $2.6 billion,' he said. Forbes also said that he expected bilateral trade between the two countries to cross $7 billion by 2015.

However. The two nations trust each other. the president said he wanted to take the relationship to new heights. state-run Oil and Natural Gas Corp's overseas investment arm OVL signed a three-year agreement with PetroVietnam for developing long-term cooperation in the oil sector in the presence of Manmohan Singh and Truong. The pact covers new investments and strengthening presence from drilling-to-dispensing in Vietnam. And though India is one of the top 10 business partners of Vietnam. whose relations with Hanoi are under strain over a host of issues. stability and development' in the Asia-Pacific region. Mentioning that he had undertaken the visit to India to strengthen the tradition of friendship and to enhance strategic co-operation. Sankaranarayanan and reiterated that Vietnam and India have always had a warm and friendly relationship and that the two countries have emerged as the fastest growing economies. Later. he added that the relationship stood 'on its own merits'. said that his nation's image in the international community has changed drastically in recent times. He also expressed the desire to encourage cooperation in the field of higher education between India and Vietnam. • Posted on 27 January 2012 by Yamunah Kandasamy .Vietnamese Deputy Prime Minister Nguyen Xuan Phuc. Undeterred by Beijing's objections. to expand their strategic partnership. In a subtle message aimed at Beijing. including an extradition treaty. India and Vietnam also launched a security dialogue and set a bilateral trade target of $7 billion to add more economic heft to their growing relationship. in his keynote address.' Nguyen said. Truong called on Maharashtra Governor K. the governor expressed the hope that Truong's visit to India will further strengthen multi-lateral relationship between the two countries. Welcoming the Vietnamese president to Maharashtra. and other countries. In an important step. Vietnam: Boosting its domestic pharmaceutical industry Rising presence of health issues such as gastrointestinal problems in the country is creating a huge demand for drugs. India and Vietnam Wednesday sealed in New Delhi an accord for oil exploration in the South China Sea and signed half a dozen pacts. Prime Minister Manmohan Singh called India's strategic partnership with Vietnam 'a factor of peace. The need is thus for strategic partnership and economic relations will receive the highest attention from us. ONGC said in a statement in New Delhi. India. bilateral business is much below potential. 'Vietnam and India have a time honoured tradition of friendship.

Statistics from the Vietnam Beverage Association shows that 5.0 percent of the nation's demand by 2015.0 percent are owned by foreign investors and 4.0 percent are joint ventures. 6 According to Deputy Minister of Health. 5There are around 171 pharmaceutical companies in Vietnam.9 percent of hospitals. With the hectic lifestyle. All of these habits led to more digestion related problems and gradually aggravates to more GI related issues. Local pharmaceutical production was valued at nearly US$920 million and met 48. Demographically.0 percent of citizens and 3. 2 Vietnam has a large and young population.9 billion last year. People use more takeaway food deliveries. According to Dr Pham Thi Thu Ho. the Gastrointestinal Department in Vietnam hospitals have been burdened with male patients having trouble with their livers or galls due to overconsumption of alcohol. Alcoholism appears to be another serious cause of increase in gastrointestinal problems in Vietnam. Such a high percentage of population suffering from this condition could be due to the fact that people in Vietnam are increasingly leading a busy and stressful lifestyle.0 percent of the nation's needs. and will remain as one of the lowest proportions in the Asia Pacific region. Imported drugs account for the remaining 52. In 2010. about 22. and many young urban consumers eat at their desks at work.0 percent.0 percent of mountaineers are alcoholics out of total population of 89.130 in 2010. Health ministry statistics show that the value of the nation's total medicine consumption reached almost US$1. they have less time for balanced meals and exercise. out of which 9.571.Vietnam: Boosting its domestic pharmaceutical industry 1 Rising presence of health issues such as gastrointestinal problems in the country is creating a huge demand for drugs. improving the domestic pharmaceutical industry would be the health sector's utmost priority in the coming years in order to satisfy 70. 3The elderly population is rising slowly. 6About 28.0 billion and annual growth will reach between 17-19 percent in 2011. Cao Minh Quang.0 percent of them have the Global Manufacturing Practice (GMP) certification. Types of drug treatments The availability of GI services in Vietnam is relatively high and it is expected to be offered in 86.0 percent of the population was affected by gastrointestinal (GI) related problems in Vietnam. The Ministry of Health forecasts that the size of the Vietnam pharmaceutical market will exceed US$2. Various drugs are available in . estimated to be the eighth largest population in the Asia Pacific region by 2016. Only a small percentage of doctors prefer the endoscopy procedure while the majority prefers to prescribe patients oral medication. VP of The Vietnam Association of Gastroenterology. 4 Rising drug consumption and government investment make Vietnam an attractive pharmaceutical market.

antispasmodics. The prices of pharmaceuticals are rising again in Vietnam. They are mostly classified into anti-diarrheal. This is causing concern for patients that are already dealing with constant inflationary pressures. Each province will also have additional provincial hospitals to ensure that there will be one hospital with a pharmacy. Other targets include increasing investment in scientific research and technological application and expanding co-operation with foreign pharmaceutical companies for efficient drugs. Of the drugs in the market. there are a significant percentage of people that spend out-ofpocket expenditure on availing treatment. prostaglandins and proton pump inhibitors. drug tariffs are expected to average at 2. 45. Despite a low per capita spending. political stability. With 22.0 percent for pharmaceutical products. Since the country is depended on 52. Higher prices are then passed on to wholesalers. retailers and ultimately the end users. However. growing private consumption and health insurance. Other categories include GI anticholinergics.0 percent of imported drugs. this would boost the demand for drugs used for treating GI conditions. It costs more for importers to purchase raw materials and finished drugs. H2 antagonists. stabilise the market and reduce the country’s dependence on foreign pharmaceutical imports. and the remaining 25. combined with private spending provides a conducive environment for both pharmaceutical companies and hospitals to offer more products and services in Vietnam. predominantly affecting essential items.0 percent of the population affected by GI related cases in the country.5 percent within five years of WTO’s accession. Foreign enterprises will be allowed to import medicines from abroad. Drugs in GI – opportunities and concerns Vietnam's US$1. 30.0 percent are over-the-counter (OTC). the devaluation of its currency (dong) is a major area of concern.0 percent are generic. they will distribute through Vietnamese distributors. Demand for medicines is supported by a thriving economy. and considering the fact that each person affected by GI may have to receive a dosage of oral drugs at various stages. The growing healthcare insurance in the country.Vietnam for GI related problems.9 billion medicine consumption market represents a good opportunity for medium to high return market for drug makers. Vietnam has pledged to set import duties at less than 5.6 percent against the government’s estimate of 17-19 percent. anti-ulcer drugs such as H pylori agents. Future outlook The Vietnam government will be consolidating and modernizing existing hospital pharmacies in Ho Chi Minh City in the period up to 2020.0 percent are patented. In addition. GI motility drugs and laxatives. Vietnam • • Market profile Doing business . Even though Vietnam’s health care service space is dominated by public sector. some research suggests that market growth could have a CAGR of 14. Other plans to develop Vietnam’s pharmaceuticals includes boosting the manufacturing of essential drugs in order to cut prices.

Hepatitis B & C infections.• • Visiting Austrade assistance Health and medical to Vietnam (Last updated: 8 Jul 2011) Trends and opportunities The market Vietnam’s healthcare system remains largely underdeveloped and both the number and quality of hospitals. a worrying trend is the increasing antibiotic resistance many Vietnamese are developing (recent tests show 70 per cent of the bacteria carried by urban Vietnamese are resistant to penicillin). Almost all drugs are available without prescription and counterfeit drugs are not uncommon in some pharmacies. and doctors have not kept pace with Vietnamese society’s needs or expectations. with per capita spending on health in Vietnam below that of other ASEAN countries such as Malaysia. Vietnamese from rural provinces will often seek treatment in these larger urban hospitals. Overcrowding in Vietnamese hospitals is a significant issue with it not being uncommon in some poorer state-run hospitals for two or three patients to share one bed. clinics. Vietnam’s pharmacies are severely unregulated and underdeveloped. Given most antibiotics are available without prescription. Current challenges Challenges in Vietnam’s healthcare sector include: • • • • • • • Most Vietnamese seek initial and rudimentary medical treatment at public hospitals clogging an already overcrowded system High child mortality and other national health issues – HIV/Aids. liver cirrhosis. There is an under supply of pharmacists in Vietnam and an oversupply of ill-regulated pharmacies. however funding is comparatively low by ASEAN standards. Healthcare units in these large urban areas are better equipped and have more modern equipment to provide health treatment that health centres in other provinces do not have. Indonesia and the Philippines. Given this disparity. Most Vietnamese have health insurance which is compulsorily contributed to by a small levy from both the employee and employer and the health insurance market is dominated by a state- . meaning patients are often given sub-standard over-the-counter (OTC) health advice. Most of the best health workers are concentrated in the larger hospitals in Ho Chi Minh City and Hanoi. lung disease and asthma are all on the rise High incidence of deaths related to road accidents Overcrowded facilities (particularly in pediatric wards) Outdated medical equipment Low salaries for healthcare professionals Insufficient government subsidy The Vietnamese Government provides funding to the country’s healthcare system. compounding the problem of overcrowding.

However. improving living standards and rising health consciousness among the local population. 34 million Vietnamese are enrolled in a compulsory government health insurance plan. This high growth makes the country an excellent prospect for long-term business. There is still great potential in Vietnam and industry players will need to try and continue raising consumer awareness not only of the existence of these products. Given the lack of competition in health insurance. the market size is still relatively small when compared to other ASEAN countries. However. Compared with Japan and China. which is organised on a provincial or national level by the MOH. Medical device Vietnam’s medical device market is estimated to be growing at a rate of about 10. expertise is still required to navigate it successfully.owned company. (government hospitals can directly buy medical devices by themselves if the amount is not exceed the limit of US$5. The government plans to expand the system so that it covers 100 per cent of the population by 2014. and time frames. healthcare consumption is expected to increase as Vietnam gradually implements a universal healthcare system. There are four main classes of medical device purchasers. but also of the benefits that they offer. Most government hospitals purchase medical devices though bidding. Foreign-owned hospitals and clinics are also a significant destination. however has uniquely young demographics as a result of the Vietnam War. which counts for 70 per cent of the market. Vietnam’s population of over 88 million should have a larger pharmaceutical market size. Although growth was still some way short of the pre-millennial rates posted by nutritionals. Vietnam’s regulatory system is less cumbersome to manufacturers in terms of the documents required.3 per cent annually. driven primarily by vitamins and dietary supplements as well as slimming products. these entities usually purchase supplies from their sponsoring country. Opportunities Vietnam’s underdeveloped health sector and Vietnam’s demand for expertise as well as its favorable demographics and high growth rates. Nutritionals continued to see strong growth in current value terms. Bao Viet Insurance Corporation. All areas of herbal/traditional products recorded increasing sales in the last two years.700) while private hospitals or clinics directly purchase those from local distributors. largely due to the low per capita spend on pharmaceuticals each year (only around US$17 per person). it was still ahead of projections thanks to increasing consumer product awareness. costs. with herbal digestive remedies and herbal child-specific dietary supplements doing particularly well. provide significant opportunities in various health sub-sectors for Australian exporters in health expertise. Tapping into the global health and wellness trend. the scheme is viewed as inadequate and ineffective in terms of meeting the health needs of a modern Vietnamese society and most health and hospital expenses still have to be met out of pocket. Local private hospitals will exhibit the strongest growth. Pharmaceuticals and nutritionals Vietnam’s pharmaceutical market has increased significantly and will continue to increase in the next few years. where relevant. The largest is government-funded hospitals. Despite this strong growth. however. will also be a good way of promoting many of the products available in the nutritionals market. Foreign companies are not allowed to . Currently. particularly in vitamins and dietary supplements. goods and services. while research and educational institutions will also account for some demand.

storage conditions and expiration date. regulations and customs Depending on the actual product. Thailand and Singapore for superior medical treatment demonstrating that current health supply is not meeting demand. sideeffects. Demand for better healthcare services from an increasingly wealthier Vietnamese population is driving this foreign health investment. an import licence for medical device takes from six months or longer for registration depending on particular product. Required documentary for pharmaceutical/supplement product: • • • • • Free sales certificate GMP Authorised letter Certificate of analysis Samples As regulated by MOH. Competitive environment The Vietnamese Government has a commitment to rapidly develop the health sector and improve the standard of its healthcare facilities.000 Vietnamese travel abroad to destinations such as China. These products must therefore follow the regulations covering pharmaceuticals in the country. with French and US companies the dominant foreign players in the market. It takes around eight months for registering a pharmaceutical/supplement product. the import tariff could vary from 5-15 per cent (pharmaceuticals). each year over 30. 25 to 40 per cent (supplements) and 0-5 per cent for medical device. The dossier required for an import license is: • • • • • Original catalogue Instruction manual and technical guide. including specifications (originals and Vietnamese translations) Manufacturer’s quality certificate: either ISO 13485 or ISO 9001 certification or FDA/CE approval of the device manufacturing site Free Sale Certificate from country of origin Quality declaration letter The MOH sets out stipulations for the packaging and labelling of medical products. There are a growing number of international hospitals and clinics in the major urban centres such as the Franco-Vietnam Hospital in Ho Chi Minh City. The government health system has already forged foreign partnerships with countries such as US.submit a tender – it can only be done via a local partner who will liaise with the organiser to submit the required documentation. it takes 15 working days of receiving legal dossier but in fact. The government encourages private sector participation in the healthcare system. Belgium and Indonesia for assistance in improving health infrastructure. dosage. There is currently no legislation relating to vitamins or dietary supplements in Vietnam. The MOH only allows imported pharmaceuticals to be put on the domestic market after registration. Tariffs. Despite the increasing presence of international standard hospitals in Vietnam’s large urban cities. These must be printed in Vietnamese on . These state that all drugs in Vietnam have to show clear instructions on their name and use. training and for research exchange and transfer. The VAT imposed from 5-10 per cent as normal rate.

The Ministry of Culture and Information is responsible for the monitoring of medical product advertising. Consequently. providing an effective distribution network across all regions.the insert inside the package. where retailing is generally underdeveloped. when local consumers can afford to buy multinational brands. UPSA and Boehringer Ingelheim. The Ministry of Finance is responsible for price control of medical products. For the majority of OTC products advertising to consumers is only allowed through media such as advertisements in magazines and newspapers or leaflets. There are a huge number of chemists/pharmacies in the country. those domestic players that previously focused on low-priced generics will face strong competition. clinics or centres Setting up joint-ventures in medical training. The monitoring of packaging and labelling is carried out by the Drug Administration Department of Vietnam (DAV). United Pharma. with one of their key competitive advantages being their lower prices than the big multinationals. pharmaceuticals and medical equipment Key challenges for exporters in the health sector include low (but increasing) consumer purchasing power. Marketing your products and services Market entry Vietnam is a suitable market for companies looking for business cooperation opportunities in the following forms: • • • • Establishing foreign-owned (100 per cent FDI) hospitals. they usually choose to do so as they feel that they offer a greater guarantee of quality. technology transfer or medical device manufacturing with local companies. UK’s GlaxoSmithKline – are all foreign companies. product batch number. which is also responsible for granting and removing licenses for all medicines in Vietnam. who they trust to recommend the best product. particularly in rural areas. Producers of standard OTC healthcare will face more competition from herbal product players with the latter offering lower prices and improved product quality. This is helped by the multinationals’ greater marketing expertise and bigger budgets for promotion and new product development. However. chemists/pharmacies offer their only access to such products. import agent and expiration date must be printed on the outside or primary packaging. More players are expected to invest in herbal/traditional products during the forecast period. particularly domestic players seeking a new niche. The leading players in pharmaceutical/nutrition – Plusssz Vitamin Kft. lack of health education and consumer awareness and the bureaucratic nature of Vietnam’s health system. there are local firms operating in this market in Vietnam. . However. A flood of economy entrants is expected from China due to the opening up of trade in the wake of Vietnam’s WTO entry. medical centres or medical universities Staff/program exchanges with local hospitals and medical universities Direct product export including in cosmetics. A shift into herbal/traditional products could therefore provide a lifeline for many players. Distribution channels For many consumers. Consumers will meanwhile benefit from better products becoming available at a cheaper price. Consumers also value the expert advice on hand from pharmacists. The company license number.

vn Australian resources Australian Self Medication Industry – www. Grocery retailers will also be looking to continue their expansion in Vietnam. distribution patterns are expected to change significantly.au Contact details The Australian Trade Commission – Austrade – is the Australian Government’s trade and investment development agency. with chained drugstores/pharmacies therefore expected to help drive the growth of sales of healthcare products into rural areas during the forecast period. Chains are expected to emerge.com. Drugstores/pharmacies are notably expected to become increasingly more important by the end of the forecast period. attract productive foreign direct investment into Australia and promote Australia's education sector internationally .org.vn Ministry of Health – www.gov.au Complementary Healthcare Council – www.gov.au Therapeutic Goods Administration – www.As the economy develops during the forecast period and living standards improve. Nevertheless. business and trade resources for Vietnam Department of Vietnam Customs – www.moh.cimsi.tga.vnpca.wsmi. we assist Australian companies to succeed in international business.org.gov.chc.org.vn Official Sources Central Institute for Medical Science Information – www.asmi.org Vietnam Pharmaceutical Companies Association – www. chemists/pharmacies are still expected to continue dominating distribution of products in the nutritionals market. Links and industry contacts Government.vn Trade Associations World Self-Medication Industry – www. Through Austrade’s network of offices in over 50 countries.customs.

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