The Himalaya Drug Company has been in the market of phtyo-pharmaceuticals for animal healthcare for quite a few years now. As compared to most other organizations which are in the chemical products segment, Himalaya’s products are created completely from natural products. They manufacture and export drugs for livestock, Poultry, Aquaculture, and domestic pets. As of today, the organization is expanding its market share within India and exports to over 82 countries. Target Country:
We will be researching the feasibility of entering the animal healthcare sector in Vietnam. The country has a population of 86 million people and the economy has been growing at 7-8% for the past two decades. About 70% of the population earn their livelihood from agriculture and animal husbandry. Furthermore, about 60% of the agriculture segment is also dependant on livestock and poultry. From the Ministry of Agriculture and Rural Development (MARD), livestock in Vietnam exists mainly in two forms: industrial farms and farmer (family) households. In 2011, there were 23’000 farms and 8.5 million household farms country-wide. They consist of 10,100 pig farms, 8.7 cattle farms and 3,800 poultry farms.
As seen, there has been a phenomenal increase in population which has more than matched the production over the years. Though the population of livestock is very large, the overall market in its healthcare and upkeep is underdeveloped. There are quite a few challenges as faced by the livestock industry today. Animal diseases are rampant- As farms are operated on a small scale basis and animals wander freely, there have been regular outbreaks of diseases such as bird flu, blue ear in pigs, and foot and mouth diseases. Lack of good and health breed supplies.
High vetinary upkeep and breeding prices.
Considering all these factors, farmers and industrial firms might be quite interested in cheap and flexible healthcare solutions for increasing their productivity and keeping costs down. Also, the market being relatively untapped, will have fewer players and increased market share for us pending the launch of the product.
Political factors play a crucial role when deciding the investment strategy or new markets. A politically stable country with sound regulations and laws are a much attractive and safer investment bet. According to the A.T.Kearney index Vietnam ranks second in the top investor preferences. The government is encouraging foreign investment to help the country’s economy grow. This is being well accepted by the market and foreign investors. The government has been encouraging investment in the poultry industry too. It is expected to grow by 38% by 2020. Therefore a lot of ancillary industries like animal healthcare are also on a rise. Due to the severe shortage of investment in this sector the laws have also become more investor friendly. Economic Analysis:-
The economic conditions in Vietnam have undergone a significant transformation post the 1970 war. The once politically isolated and economically backward economy had transformed itself and has been focusing on growth. The government has been striving to drive economic development. It has also worked towards developing political treaties and diplomatic relations with all the major countries. In the year 2000 Citigroup rated Vietnam as one of the fastest developing economies of the world. With the government encouraging growth, the country is very investment friendly. They have also recently adopted free market reforms. In 2011 the nominal GDP was worth $121.6 billion. The GDP growth was at 19% which is one of the highest in the world. The per capita income is also expected to rise by 65% by 2020. According various research reports by Goldman Sachs and PWC Vietnam will become one of the largest economies of the world. This makes it...