Experience sharing workshop among SCIC-linked pharmaceutical companies

Experience sharing workshop among SCIC-linked pharmaceutical companies

Hanoi, Janurary 22nd 2016 – The State Capital Investment Corporation (SCIC) holds an experience sharing workshop among SCIC-linked pharmaceutical companies.

The workshop attendants included Mr. Truong Quoc Cuong, Director General of the Pharmaceutical Management Department of the Ministry of Health; Mr. Tran Huu Huynh, President of the Vietnam International Arbitration Centre (VIAC), former Head of Legal Department of VCCI; together with SCIC’s state capital ownership representatives at enterprises, the management and employees of the pharmaceutical companies where SCIC represents the majority shareholding, including: Hau Giang Pharmaceutical JSC (DHG), Domesco Medical Import-Export JSC (DMC), Traphaco JSC (TRA) and Hanoi Pharmaceutical & Medical Equipment Import Export JSC (Hapharco).

In the context of Vietnam’s global integration and active participation in the trade liberalization with its accession to various bilateral and multilateral Free Trade Agreements (FTAs), Vietnam’s pharmaceutical companies will be confronted with both opportunities and challenges. With a view to getting pharmaceutical companies well-prepared with industrial intelligence to enhance their competitiveness against overseas companies, SCIC has hosted this workshop to share pharmacy-related operations and management experiences; update the information about the business environment of the pharmacy industry as well as the progress of executing the Trans-Pacific Partnership (TPP) and other pharmacy-related FTAs.

“In the capacity of a long-term and major shareholder at 3 pharmaceutical companies, through our corporate governance practices and financial capability, SCIC will deploy our business strategies in such a way that promotes our portfolio companies’ strengths. We will closely cooperate with them to continue to enhance their operating mechanism and develop their strategies in alignment with the new context and market conditions. Regarding the policy shortcomings that affect companies’ business operations, SCIC will stay side by side with the companies to remove the difficulties and serve as a bridge between the companies and state regulatory bodies in related areas so as to develop pharmaceutical companies in strict accordance with the objectives stated in Decision 68/QĐ-TTg by the Prime Minister”, said Mr. Lai Van Dao, SCIC’s General Director.

On January 10th 2014, the Prime Minister issued Decision 68/QĐ-TTg approving the national development strategy for Vietnam’s pharmacy industry till 2020 and vision till 2030; thereby, developing the pharmacy industry following the guidelines of specialization, modernization, enhancement of competitiveness against other nations in the region and worldwide, and development of a modern, professional and standardized medical supply chain.

The Prime Minister also dispatched document No. 1787/VPCP-ĐMDN dated 8 October 2015 on the Restructuring Project of the State Capital Investment Corporation; thereby, SCIC will continue to retain the state capital and long-term investment in 3 pharmaceutical companies, namely DHG, TRA and DMC, where SCIC holds 43.4%, 35.7% and 34.7% of charter capital respectively. These 3 pharmaceutical companies have total assets of nearly VND 6,000 billion, with an owner’s equity of over VND 4,000 billion, charter capital of nearly VND 1,400 billion, in which SCIC’s ownership equals VND 570 billion. These are also the 3 market leaders in Vietnam in term of owner’s equity (from VND 700 billion and above), earnings (from VND 1,500 billion and above) and are well-performing companies with an average return on equity (ROE) of over 20% and advanced technological and manufacturing capabilities.

With the capacity of a majority shareholder, SCIC has accompanied enterprises, getting deeply involved in their corporate governance and project investment activities in accordance with SCIC’s long-term strategy, i.e. assisting enterprises in their governance and management practices in order to enhance their business performance and move toward advanced governance standards; entering into agreements with strategic partners so as to assist enterprises in their restructuring; providing consultancy to optimize production and trading activities. Besides, SCIC frequently gets connected with enterprises, actively exchange experiences and market intelligence with the aim to effectively organize general shareholders’ meetings, Board of Directors’ meetings and instruct enterprises to align their operations to existing laws and regulations.

The 3 above pharmaceutical companies are fairly well-performing with an average ROE of approximately 18% for 2015. Their average growth rate for 2011-2015 is as high as and even about 7% higher than that of the pharmacy industry in this period. The prominent figures, for example, are Traphaco’s average earnings and profit growth rates which are 13% and 16% respectively, being the highest among pharmaceutical manufacturing companies in the country.

Some features at the workshop: