B.Braun aims for big expansions

Vietnam is a strategic manufacturing base for B.Braun

Jonathan Catahan, general director of B.Braun Vietnam, said the compound investment capital of the firm in Vietnam would surge to $270 million within seven to nine years with most of the investment made within the next two to three years.

After more than two decades in Vietnam, B.Braun has two medical plants in Hanoi’s Dong Da and Thanh Oai districts. The firm is to invest an additional $50 million in the second stage of its plant in Thanh Oai this year, raising the total investment for this plant to $94 million.

When the second stage of its third plant, also in Thanh Oai, comes into operation by 2016, total investment in the two plants in Thanh Oai will increase to $191 million.

B.Braun Vietnam produces healthcare products such as infusion solutions and devices, IV cannula, sutures, surgical instruments, value added drugs and clinical nutrition.

B.Braun has subsidiaries in 60 countries including China, India and Japan. Vietnam is the firm’s second biggest manufacturing base in Asia, following Malaysia.

Vietnam, where B.Braun claimed it held the largest domestic market share, is obviously key for the firm given the country’s 90-million population, surging demand for high quality healthcare, rising disposable income and the government’s increased attention to improving the public and private healthcare systems.

Last year B.Braun recorded $72 million in sales turnover of which 48 per cent came from the Vietnamese market and 52 per cent from exports.

But B.Braun expected its export ratio to climb to 70-90 per cent in the future, reflecting Vietnam’s increasing importance in the firm’s global supply chain.

“That’s why we are working on a very tight schedule for the new projects, because any delay would mean interruptions to our global supply network,” said Catahan, who has been with B.Braun for 28 years.

B.Braun’s Vietnam-made products are exported to Europe, the US and Asia. “Asia is  a very fast growing region which will grow even faster from 2014, 2015. That’s why we need products to sell to all other countries in Asia,” Catahan added.

Meinrad Lugan, a board member of B. Braun Melsungen  AG, said that B.Braun Vietnam is “a real success story”.

“B.Braun Vietnam is profitable and the firm here is capable of financing most of its new investments from its cash flows,” Lugan told VIR while attending B.Braun’s ceremony to unveil its Thanh Oai medical plant expansion project last week.  

B.Braun currently employs 991 staff, with its workforce set to grow by another 1,300 when the new projects come on line. Lugan said the quality of Vietnam’s labour force was a major driving force of B.Braun’s large investments in the country, and not cheap labour costs.

B.Braun is now intensifying efforts to train and recruit qualified engineers and technicians to pursue its investment expansion inspirations.

The firm is collaborating with Hung Yen University on a technical industrial apprenticeship programme and working with Danang University on bio-technology training.

B.Braun’s executives said investment-related approval procedures and exchange rate stability were among the issues of biggest concern for B.Braun when executing its projects in Vietnam.