Sanofi expands in Asia
02.04.2013 - Sanofi will expand its current 4% market stake in Vietnam. Between now and 2015, the French drug major will invest US$75m in a production plant.
The plant, which will be operative by 2015, is designed to meet the raising demand for pharmaceuticals in fast-growing Asian populations such as China, Indonesia and Vietnam. It will have an initial capacity of 90 million units per year, which may be later extended to 150 million units, according to the company.
Sanofi currently runs two plants in Ho Chi Minh City at full capacity, according to Sanofi CEO Chris Viehbacher. “Asia continues to grow and it seems to be less affected by the European economic difficulty,” said the company's head. The rise of income and urbanisation in the region will give people more access to health care. Currently sales from Sanofi’s Vietnamese plants are growing 25% annually, creating more than US$128m annually in Vietnam alone. The company, which exports just 20% of the drugs manufactured in the country, will now expand its production capacity to create an export platform for the Southeast Asian region.
In 2012 Sanofi delivered almost one third of its US$35bn sales in emerging markets, US$4,9bn of that with diabetes drugs alone, where the French are world market leader. Asian countries contribute to more than 60% of the world’s diabetic population and their prevalence of diabetes is increasing. Asians have a strong ethnic and genetic predisposition for diabetes and have lower thresholds for the environmental risk factors. As a result, they develop diabetes at a younger age and at a lower body mass index and waist circumference when compared with the Western population.