South Korean Dongwha Pharm buys majority stake in Vietnam's Trung Son Pharma

August 08, 2023 | 14:41
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The retail pharmaceutical landscape in Vietnam is poised for further heating up as Dongwha Pharm, a South Korean conglomerate, joins the fray.
South Korean Dongwha Pharm buys majority stake in Vietnam's Trung Son Pharma

On August 3, South Korean firm Dongwha Pharm announced the acquisition of a 51 per cent stake in Trung Son Pharma, a company that operates a chain of pharmacies in Vietnam, as reported by Business Korea.

In a filing with the Korean Stock Exchange, Dongwha Pharm disclosed that it spent nearly $30 million to acquire 51 per cent of Trung Son Pharma, equivalent to over 12.15 million shares. The deal is expected to be completed by October this year.

Established in 1997, Trung Son Pharma operates more than 140 pharmacies primarily in the southern region, with the highest concentration of 45 stores in Can Tho city. Last year, the company reported a revenue of $56.5 million, generated from the sale of prescription and non-prescription drugs, functional foods, cosmetics, and medical equipment.

The acquisition will provide Dongwha Pharm with an entry point into the Vietnamese market for over-the-counter drugs. The company also plans to sell cosmetics and functional foods beneficial to health.

According to its information, Dongwha Pharm, the first established pharmaceutical company in Korea founded in 1897, has been engaged in development, production, distribution and marketing of ethical drugs including solid dosage formulations and sterile injectables, over-the-counter drugs, food supplements, healthcare products, and cosmetics.

The South Korean conglomerate anticipates that following the acquisition, Trung Son Pharma may expand its network to 460 stores by 2026.

According to market research firm BMI, Vietnam's retail pharmaceutical market is highly fragmented, with over 50,000 pharmacies that are mostly small-scale businesses. The market is forecasted to grow from $7.7 billion in 2021 to $16.1billion by 2026. However, the actual figure could be significantly higher.

By 2030, the total value of Vietnam's pharmaceutical market is predicted to rise to around $13 billion. In 2022, the average per capita drug spending reached about $75.

In this market, there are three leading chains: Long Chau, Pharmacity, and An Khang, according to a report from ACB Securities. While Long Chau turned a profit in 2021, the other two chains have yet to do so.

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