International investor influx in Southeast Asia
Geopolitical stability, gradually rising living standards and the introduction of universal healthcare systems is fuelling investor interest across Southeast Asia, particularly in Indonesia, which is home to the largest and fastest growing market.
The recent rule changes to foreign ownership in Indonesia – increasing from 75% to 100% – have meant that international pharmaceutical companies are looking for both regional partners and acquisition targets for a local manufacturing base. This, in turn, has increased the capital access for manufacturers across the region as investors look to “get in early” among the best facilities before a potential round of consolidation and an increased interest from multinational pharmaceutical companies.
CPhI South East Asia reflects trends
These improving regional conditions are reflected at CPhI South East Asia, held 27-29 March, which returns to the Jakarta International Expo (JIExpo) in Indonesia for its seventh edition, where there has been an increase in domestic, regional and multinational manufacturers attending. In total, 41 countries and over 5,000 attendees will be present, with 260 exhibitors coming from 22 countries and an increasingly diverse range of industries.
“It’s a very competitive market at present and, while there is strong investment coming in, the middle-tier of manufacturers in Indonesia are competing to acquire increased scale and our visitors are looking to secure the most robust supply chains that can help them sustain growth in this expanding market. So, although the outlook for growth is very optimistic, it remains a crucial time to build the right supply chain infrastructure and partners,” commended Chris Kilbee, group director of Pharma at UBM.
Generics sales expanding in Vietnam and Philippines
Vietnam- and Philippines-based companies are also regionalising their approach to sales, with ASEAN economic community and the acceleration of local health insurance schemes contributing to confidence. Generics in both markets are reportedly benefiting and sales are expanding at just under 10% in the Philippines, which is forecast to reach US$7.9 billion by the close of the year.
Kilbee added: “What we also see is a regional network being built. With increased visitors from Thailand, the region’s second largest market, as well as investors and visitors from Singapore – another regional distribution and investment hub.”
New forums at CPhI South East Asia
In response to the increased regional foreign direct investment, CPhI is running an invitation-only investment forum to match the key international investors with top tier pharmaceutical companies looking for reliable partners.
This year also sees the introduction of LABworld South East Asia, a new co-located zone to support the laboratory, analytical and biotech equipment industry, which has expanded quickly as companies in the region look to adopt international standards. The Indonesian Institute of Sciences (LIPI) states there are only 500 metrology laboratories and 120 calibration laboratories in the country – low by regional standards – highlighting another key infrastructure gentrification under way.
For more information, visit CPhI South East Asia’s website.