In 2021, there is a witness about dramatically increase in the quantity and quality of pharmaceutical storage system (GSP warehouse) in Vietnam. In addition to self-construction of standard storage warehouses, recently foreigner investors tend to rent warehouses in Vietnam to optimize costs and human resources. Through this document, we hope to be able to provide you with a complete overview of the ownership of GSP warehouses by foreign and domestic enterprises in Vietnam.
I, Foreign Invested Enterprise
1, Should foreign enterprises hire GSP warehouses or invest in the construction themselves?
Foreign invested enterprises can invest and construct a GSP warehouses to preserve the products that enterprises import. If your enterprised have not built a warehouse, or own a warehouse, you can also rent a warehouse of Vietnamese enterprise that meets GSP .
In case of renting a warehouse, the FIE enterprise must directly manage and operate that pharmaceutical warehouse ( or medicinal ingredients) (This is considered the basis requirements for the Drug Administration issuing the Certificate of Eligibility for direct drug import-export.
FIE Enterprises are not allowed to rent the warehouse of another FIE enterprise for applying for the Certificate of Eligibility for Pharmacy Business that allows export, import and wholesaling of drugs.
Enterprises, including foreign and domestic enterprises, are not allowed to rent a storage warehouse (with preservation service - of a domestic enterprise) for applying for the the Certificate of Eligibility for Pharmacy Business that allows export, import and wholesaling of drugs.
2, The current situation of foreign enterprises owning GSP warehouses
Currently, there are a number of large foreign enterprises in Vietnam that own GSP warehouse system such as:
- DKSH owns 03 warehouses in Hanoi (Quang Minh IP), Da Nang, Binh Duong (VSIP IP) and leases some warehouses, mainly partners.
- Zuellig has its own warehouse at Tan Tao Expanded IP, VSIP Bac Ninh IP and leases additional warehouses such as Coduphar, Dong A, ...
Despite having invested in large GSP storage warehouses, large foreign enterprises (Zuellig, DKSH, Mega, ...) along with many other foreign enterprises (more than 300 enterprises - according to annual statistics. 2020) have a need to rent a storage warehouse that meets GSP regulations. Domestic distribution enterprises that are oriented to invest in GSP warehouses to meet this demand have not invested enough in scale, or have not met their requirements, so the demand for renting GSP warehouses of foreign enterprises is very large.
Zuellig's Pharmaceutical Storage Warehouse
For example:
- In 2017, Codupha completed a general pharmaceutical warehouse with a scale of 7,000m2 in Le Minh Xuan Industrial Park - Ho Chi Minh, but in less than 6 months, it was full. Zuellig has surveyed and assessed to meet the requirements, but the capacity is not enough to meet the requirements of customers.
- In 2018, Mega and Zuellig proposed Hapharco to invest in a larger GSP warehouse (compared to a warehouse with a size of ~2000m2 at Truong Chinh Street) for cooperation. Hapharco has set up an investment project to build a warehouse with a scale of 10,000m2 in Thuong Tin Industrial Park, however, due to mergers and acquisitions, the project has been moved to Quang Minh Industrial Park, and up to this point has not been completed. GSP certification to go into operation.
Based on the above information, we can see that this is a group of enterprises that have great demand for GSP warehouse rental with high standards, meeting their Internal Management System and higher regulations such as EU - GDP.
II, Domestic Enterprise
1, Pharmaceutical Manufacturer and Distribution
Most of the pharmaceutical manufacturing enterprises in Vietnam have built their own distribution route (without specializing in the common and popular model of the world). This is also a problem that is considered to be the reason why it is difficult to develop strongly because it has to put resources into many areas, and at the same time leads to fierce competition. With the characteristics and regulations of the pharmaceutical industry, at each storage units, they must meet GSP requirements/standards, that leading to big enterprises such as DHG Pharma, Traphaco, ... all have branches (GDP) in most provinces across the ry, along with a distributed warehouse system at these headquarters/branches. The distributed investment in storage warehouses in additional of the restructure, personnel costs ... lead to huge logistics costs.
These enterprises seem to have realized the inadequacy of this model, but it is not easy to solve in the short term because restructuring the distribution/logistics system will require large storage systems - Enterprise Businesses do not have enough resources to build their own, but the market has no alternative solutions, proving its effectiveness.
Conclusion: This is a group of enterprises that invest in GSP warehouses themselves, have realized the inadequacies of the model, but have not had an alternative model. If there was an alternative service model that proved more effective, this would be the group of potential customers.
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GSP Storage Warehouse
2, Distribution Enterprise ( Non manufacturing)
It is estimated that there are more than 400 domestic enterprises specializing in distribution only participating in the pharmaceutical market (and about more than 1,600 other small distribution enterprises - GDP certified). The investment in small-scale storage warehouses (30m2 ~ 100m3) to meet the requirements of GDP (necessary conditions to be granted a Certificate of eligibility for drug distribution) at the headquarters and markets (provinces) in which they do business, leading to huge investment and operating costs. The problem of these businesses is: If you only store goods at a limited number of locations, the delivery time will not meet. If storing goods at many locations, each location must invest in a GDP/GSP basis, the investment and operating costs are very large or investment is not possible.
In this group, only a few enterprises such as Codupha, Hapharco, ... have large storage warehouses, which are used to preserve the drugs they themselves receive as import entrustment services (for foreign partners). ) and they distribute themselves (Processing tenders, distributing to hospitals). This system of warehouses is just enough to meet the needs of enterprises themselves.
Conclusion: This is a group of businesses that desperately need preservation and storage services, but there is no model that can meet the needs and prove its effectiveness.
See more:
Codupha's GSP Pharmaceutical Storage Warehouse
Harphaco's GSP Pharmaceutical Storage Warehouse
3, Logistics Enterprise - GSP warehouse rental service
Currently, there are a number of enterprises that have realized the potential of the pharmaceutical logistics market and entered this market. There are 03 main enterprises, including:
Dong A Pharma
Joined Logistics business since 2009;
The company's headquarters in Hanoi is more than 5,000 m2 in Tu Liem IP;
Hanoi warehouse: 03 GSP warehouses (total area 3,010m2, capacity 2,890 pallets),
GSP warehouse in Ho Chi Minh City (area 1,500 m2, capacity 1,404 pallets)
GSP warehouse in Hoa Khanh Industrial Park - Da Nang (area 3516m2, capacity 3900 pallets)
Total GSP warehouse: Size 8,000 m2 warehouse ~ 8,194 Pallets
Assessment: The scale of the warehouses is still small, only suitable for small and domestic companies. Non-optimized service model, specialized (including self-distribution drug service)
GONSA
GONSA also develops the initial business of investing in drug distribution services
Then develop delivery service and collect money for partners combined with receiving drug distribution for partners.
In 2019, Gonsa invested in a storage warehouse with a scale of ~8,000m2 (~8,000 Pallets) in Hiep Phuoc, developing pharmaceutical logistics services.
Currently, the rental capacity is also >50%, but mainly doing maintenance services for Stellapharm - The company acquired Stada in August 2019
Outsourcing services for other businesses have not yet developed, due to Gonsa's business model (The company still maintains its drug distribution and bidding business)
Hoang Duc Pharma
Owning a GSP warehouse in Long Hau IP with a scale of 17,000m2, a capacity of 8,000 pallets (phase 1), operating March 2019
Services: Secondary packaging: processing for replacement of prescriptions, medicine boxes, printing & stamping, extra labels... Management of goods, import and export and order processing; Pharmaceutical transportation - according to GDP standards. Delivery and collection (COD).
The company still maintains the distribution of drugs and medical equipment.
Although these enterprises have had experience in participating in the pharmaceutical distribution market, the business model of pharmaceutical logistics services is not optimal, not large enough in scale, as well as keeping the self-service segment. Distributing conflicts of interest with customers.
