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Sanofi spends $75M on Vietnam facility, eyes China growth

World News | April 02, 2013


Kevin Grogan

Sanofi spends $75M on Vietnam facility, eyes China growth

Sanofi has unveiled plans to expand its operations in south-east Asia through the construction of a new manufacturing facility in Vietnam.

The plant, at the Saigon High Tech Park, Ho Chi Minh City, will cost $75 million and will constitute Sanofi’s largest investment in Vietnam to date.  With an initial capacity of 90 million units per year - and a possible extension up to 150 million units - the facility is scheduled to be fully operational by the end of 2015.

The company said the new plant "will join Sanofi’s existing network of 40 manufacturing sites in emerging markets". Speaking from Vietnam, chief executive Christopher Viehbacher (pictured) said the facility will help the firm to meet the fast-growing demand of the local pharmaceutical market and "serve as an export platform to the Association of South East Asian Nations (ASEAN)".

He went on to note that Sanofi is no newcomer to the area. It has been present in Vietnam for more than 50 years "and has built the number one position in one of the most dynamic south-east Asian countries", Mr Viehbacher said, adding that the investment "will contribute to further strengthen Sanofi’s leadership position in emerging markets”.

Sanofi has about 1,200 employees in Vietnam and is the only foreign pharmaceutical company with two WHO-GMP-certified manufacturing facilities in Ho Chi Minh City, manufacturing 80% of the firm's products which are marketed in Vietnam. It has "established a strong partnership" with local group Vietnam Pharmaceutical Corp, known as Vinapharm, since 1993, and last year the Sanofi Vietnam subsidiary is the leader in the sector with a market share of 4%.

More China facilities

Meantime, Mr Viehbacher has told the Wall Street Journal that Sanofi plans this year to open four manufacturing plants in China, up from its current six. In an interview with the newspaper, he added that the firm aims to move further into China's smaller cities as the government builds more hospitals and local clinics.

The CEO also noted that Sanofi is looking for healthcare and animal health acquisitions in China. The company expects to see double-digit sales growth in the country in the next five years, though Mr Viehbacher acknowledged that pricing pressures present a challenge.

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