Pharma firm invests in new factory

Pharma firm invests in new factory

Chris Viehbacher – Sanofi Chief Executive Officer

(VNS) Sanofi, a French-based pharmaceutical company, has announced a new project worth US$75 million – its biggest investment in Viet Nam so far despite the current economic downturn. Sanofi CEO Chris Viehbacher spoke to Viet Nam News at a local press briefing about the group’s commitment in Viet Nam.

Why have you chosen this area of the world as the next step for Sanofi?

For us, Viet Nam is a country that is experiencing a period of strong growth with its population of 90 million, the education system; the strongly growing economy; and its very talented people. It is a country where we currently hold a leading position in the pharmaceutical market and where we want to continue to invest further. I really want to understand more about the culture, the government, and the needs of the Vietnamese society.

This part of the world is seemingly well insulated from some of the major macro-economic crises currently hitting regions like Europe and the US. And this is one of the reasons why we find that it is a strategic area for investment.

Could you give us some more details about the new project in which you will be investing in Viet Nam?

We will be investing US$75 million into our third factory in the Saigon Hi-Tech Park in outer HCM City which will be the group’s largest project in the country to date. The factory will have an initial annual capacity of 90 million product units, which will increase to 150 million in the future and we envision starting operations in the factory by 2016.

Products will include pharmaceutical and consumer health-care products. We decided to build this new factory in order to increase our manufacturing capacity and to keep our technology up-to-date, since our first two factories were constructed nearly 50 years ago. We recognise the need to build our capacity and grasp opportunities to export from Viet Nam to other Southeast Asian nations. This is a show of confidence that we have in the Vietnamese market and the people here.

What do you have to consider when investing in a country? And what would you consider as the advantages and disadvantages of investing in a developing country like Viet Nam?

Foreign-invested pharmaceutical companies not only meet the needs of the local population but also create jobs locally. — VNS Photos

The first thing we look at when investing in a country is the stability in economic policy, and a regulatory environment that will allow us to get established. We also look for a system in which local and foreign companies are treated on a level playing field.

You have a lot of investment and a lot of electronic and manufacturing coming in which will bring skills upgraded to the labour force that we and the pharmaceutical industry will also benefit.

However, in a developing country like Viet Nam, you will find that the regulatory system is complex. We have to follow the five-year process for registering a new product, so innovation takes longer in Viet Nam, but I think that the government is looking at new ways of speeding up this process which will be very helpful.

I would say another challenge of working in the pharmaceutical industry in emerging markets such as Viet Nam is finding the right people and then retaining a talented work force.

What are Sanofi’s objectives for this year? What are the mid-term and long-term strategies in Viet Nam?

We are trying to develop products that not only meet the needs of the local population but also products that can be produced locally and so create jobs locally too. In terms of cost, we are aiming to make medicine that is more affordable to the people in this country.

We are also aiming to find ways to access more remote areas, because you know our business principle is around HCM City and Ha Noi. So now we are looking to see how we spread our business to the whole part of the country, but it brings logistical challenges in terms of distribution. For example, how can we ensure that our products reach the small pharmacies and small villages, and how can we find the people with the right professional skills to go and present our products to physicians in all over parts of the country. These are the problems we face when considering expansion. For the most part, we’ve been happy with our over fifty years history in Viet Nam.

Why did Sanofi choose Viet Nam as a site for a clinical study for Dengue vaccine? How do you ensure the patients’ safety because a lot of people are concerned about possible side effects?

Dengue fever currently affects half of the world’s population, with global warming helping the spread. Dengue has been detected in southern parts of the United States and southern parts of Europe too. There is no treatment for the disease and we have been developing vaccines for 20 years. You have to do major study. There is a lot of dengue in Viet Nam and we have been doing studies on 2500 patients in the Mekong Delta area. We hope that we will be able to have a vaccine approved in 2015, and we hope the product can be rolled out as soon as the end of 2015 and perhaps early 2016.

It takes a long time to develop a medicine and vaccine but it is nevertheless extremely important. Any medicine or vaccine released must initially be tested. For example, a vaccine for dengue will be tested on 50,000 people before actually coming into the market. And of course even when we do have a medicine in the market, we have to follow up the side effects and valuation of the product.

The Ministry of Health for example have released figures of over 100,000 cases of Dengue hemorrhagic fever, so I think a vaccine for Dengue can be a major contributor to public health.

You may have heard that the Vietnamese pharmaceutical companies are getting support from the Ministry of Health and the government is encouraging Vietnamese people to use local medicine. So what are your strategies when competing with local companies?

Generally, we have achieved success because firstly, people truly believe in the quality of Sanofi medicines. When people see medicine from Sanofi, they know that it is a global company which adheres to a certain high quality. And secondly, we tend to have more innovative products because we have invested a lot in research and development. We are perfectly happy with competing alongside with other multinational and local companies, providing patients with more choices. — VNS