VietNamNet Bridge - Hau Giang Pharmaceutical Company (DHG) is negotiating with a local company in Myanmar to open a joint venture project, according to Bloomberg news service.

Medicine production at the Hau Giang Pharma Company.

DHG said it would spend VND91 billion ($4.5 million) on this project to produce medicine. The construction of the plant could begin next year if the two parties reach an agreement.

DHG’s Chair Pham Thi Nga confirmed the possible investment, but noted that the company was still in the survey period.

"We have just conducted a survey to understand market demand and especially the law in Myanmar," she said. Lacking information, Nga said she could not say much about the expected profits from this market.

However, DHG’s moves are said to be consistent with its goal of increasing export revenue by 25% within five years.

This also takes place in the context of Vietnam authorities who are conducting a number of measures to tighten the sale of drugs without a prescription from a doctor, one of the causes of increasing resistance to antibiotics.

"We are preparing for the reduction of antibiotic sales due to tighter control,” Nga told Bloomberg.

In Vietnam, 78% of antibiotics are sold through drugstores without prescriptions from doctors, according to a report by FPT Securities Co. issued in January.

Last year, 41% of DHG revenue came from antibiotics. The company also sells analgesics, nutritional food, respiratory, cardiovascular and digestive medicine and skincare products.

"Myanmar is similar to Vietnam 10-15 years ago, but they can grow faster. Myanmar does not have many pharmaceutical companies. Therefore, they have given some special incentives for pharmaceutical companies. We will gain an advantage if we cooperate with a local company," said Nga.

According to the International Monetary Fund (IMF), Myanmar's population is about 65 million compared to about 90 million in Vietnam.

Over the past decade, Myanmar’s average economic growth was 8.7%, raising the country's GDP per capita in 2013 to $869, compared to 6.4% and $1,902 in Vietnam.

DHG shares have risen by 15% this year, raising capital value to VND8.6 trillion ($1 = VND21,000). Its revenue rose 20% to VND3.53 trillion last year.

DHG is not Vietnam's first business to seek investment in Myanmar. Many large enterprises such as Hoang Anh Gia Lai Group, FPT and the Bank for Investment & Development of Vietnam (BIDV) have invested in this market.

S. Tung