As no firms occupy more than 20 per cent of the $5.2-billion domestic pharmaceutical market, it remains an appetising cake for many chains, such as Mobile World, FPT, and lately Nguyen Kim, which has been repeatedly planning to acquire 51.14 per cent in Lam Dong Pharmaceutical JSC (Ladophar, code: LDP).
|Nguyen Kim wants to raise its ownership rate to 51.14 per cent rate in Ladophar. Photo: nhipcaudautu.vn |
Nguyen Kim Investment and Development JSC in early June registered buying 2.12 million LDP stocks (equalling 27.14 per cent), aiming to raise its ownership rate from the current 24 to 51.14 per cent and seizing control over Ladophar. The transaction is forecasted to be carried out from June 4 to July 24.
Nguyen Kim has been planning to take control of Ladophar, but currently, the technology retailer is co-operating with the pharma firm in the form of a joint venture company. If the transaction is completed, Ladophar will become Nguyen Kim’s subsidiary and continue to do business in the pharmaceutical industry.
|This promising market has many retail chains, such as Mobile World (1,065 stores), FPT (519 stores), and Nguyen Kim (58). These technology retailers may apply their store chain management format for pharmaceutical business, which is expected to help them take large market shares. |
Currently, LDR is listed on the Hanoi Stock Exchange (HNX) with the average price of the 60 latest sessions of VND26,600 ($1.17). Thus, to seize the controlling rights, Nguyen Kim has to pay VND56 billion ($2.46 million) at least.
Nguyen Kim made its first investment into Ladophar in late 2014 by spending dozens of billions of VND to buy 10 per cent of the firm’s capital. Afterwards, the technology retailer raised its ownership to 24 per cent. In addition to Ladophar, Nguyen Kim also poured dozens of billions of VND into FT Pharma.
Not only Nguyen Kim, but other technology retailers like Mobile World, FPT, Digiworld, and even giant Vingroup are seeking opportunities in pharmaceuticals.
zing.vn quoted many experts as saying that the pharmaceutical distribution system in Vietnam mainly lays in the hands of private drugstores, but none of them occupies over 20 per cent of the market.
At FPT's annual general shareholders’ meeting on March 28, Nguyen Bach Diep, chairman of FPT Retail, announced the plan to increase the Long Chau pharmaceutical chain to 400 units by 2022 with an annual average of 100 drugstore openings.
In early 2018, electronics retailer Digiworld mapped out its road to conquer Vietnam’s healthcare product market.
Accordingly, Digiworld JSC plans to boost its presence in the healthcare and consumer goods industries this year. The goal is to earn at least VND200 billion ($8.78 million) in gross revenue from these two sectors this year.