During recent weeks, the French-owned Sanofi Group, which has been active in Cambodia for 20 years, took a big step forward. Though the pharmaceutical company’s profits in the Kingdom are relatively small, Sanofi is now planning to expand to all 24 provinces, having stepped up its presence in Southeast Asia with a Cambodian subsidiary in March 2011.
The Post’s Sarah Thust spoke with Benoit Martineau, head of Sanofi’s Cambodia and Laos operations.
Why has Sanofi decided to increase its activities in Cambodia?
Basically, we think it is important for us to have a dedicated local presence here and to develop our products, but mainly to ensure access for the patient. We drive a strategy based on access. That’s why we have been expanding to all provinces since January. The sales are very small, we are probably losing money doing this, but we think it is important.
Sanofi’s main business in Cambodia is to import, promote and distribute more than 70 pharmaceutical products and vaccines addressing key therapeutic areas (cardiovascular disease, diabetes, internal medicine, pediatrics, infectious diseases and public health). We will also actively participate in various medical education programmes in Cambodia, as well as undertake humanitarian action.
Sanofi is very dedicated to Indochina, as the growth is very high compared to the rest of the Southeast Asian market. In 2010, emerging markets contributed 29.9 per cent to group sales.
Why is growth in the Indochina market so high?
First of all, it was a rather underdeveloped market, if you consider the size of the population (90 million in Vietnam, 15 million in Cambodia, seven million in Laos).
Also, we want people to be able to access our medicine. Before, in Cambodia, people in the provinces were not able for a long time to access high-quality medicine. Vietnam is a little bit different, because a big part of the market is in the public sector. The Vietnamese government also recently decided to develop access in district hospitals. On the other side, Thailand is a much bigger market that is still growing, but at a slower pace. Singapore and Malaysia also have a bigger market.
In Vietnam, we are a leader, as we have been there for 40 years. We now have the luxury to focus on Cambodia, while others are still trying to settle down and establish their presence in Vietnam. We will continue to focus heavily on Vietnam, where we have more than 1,000 employees, two factories and a third one starting soon.
Bayer also plans to expand to Cambodia’s provinces. Are you worried about competitors?
Currently, we’re ahead of all the competitors, but they will start. Bayer started, I guess GSK will make a move soon to set up an affiliate. However, due to the shape of the market and the lack of regulations competitors are working together rather than competing. That is why we set up the pharma working group at the Eurocham.
The position of Cambodia is rather difficult. From a pure business perspective, it’s a small market. The neighbouring countries have a much higher population. But it’s wrong to only address this on a business perspective. What we want to address is the patient’s perspective, which is rather a long-term strategy.
What still needs to be done?
In Cambodia, the market is more open and that’s a problem. While countries in Europe or the United States have only few distributors for medicine, Cambodia has about 200. The barrier to enter the market is rather limited. We’re trying to support the authorities to shape the market, to create more rules.
On the manufacturing perspective, the problem Cambodia will face are the neighbours that put a lot of focus on pharma. Currently, Cambodia is not seen as the first priority for multinationals to invest in factories, especially as manufacturing requires a lot of skills and experience, which currently is limited in Cambodia, but available in Thailand and Vietnam. That’s why we have factories in Vietnam, Thailand, Indonesia and Singapore.
It is the job of the government to make the market more attractive.
Public health experts in Cambodia criticised Sanofi for trials for a dengue vaccine conducted in neighbouring Thailand, saying the outcome would be too expensive for those who need it. What do you say to that?
We recently signed an agreement with the Thai government to develop local medicine. In Cambodia we only do small studies. The lack of expertise in Cambodia’s
labour force doesn’t allow us to go further.
However, we also supply NGOs. Our program Access Medicine allows us to offer therapeutic solutions at an accessible price. For example, we try to find a way to provide cheap and high-quality products against epilepsy in Cambodia.
To contact the reporter on this story: Sarah Thust at email@example.com