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Bangkok Dusit Medical Services sees a market in generics

Bangkok Dusit Medical Services says its subsidiary Medicpharma meets international standards for exporting generic drugs globally.

BANGKOK -- Thailand's largest hospital operator, Bangkok Dusit Medical Services, wants to take a leaf out of India's book and turn the country into an export hub for generic drugs.

BDMS opened a production facility on Wednesday outside the capital. The 18,000-sq.-meter facility is the second plant of Medicpharma, a pharmaceutical subsidiary of BDMS that already produces non-steroid generic drugs ranging from vitamin tablets to penicillin.

The latest expansion has involved an investment of 920 million baht ($26.7 million), and will initially target markets in Southeast Asia.

"My eyes are on ASEAN [Association of Southeast Asia Nations]," Prasert Prasarttong-Osoth, the founder and president of BDMS, told reporters at the plant's opening ceremony. "I want to be one of the top five in the region."

Prasert said the group's mid-term ambition is to raise operating income to 100 billion baht ($2.9 billion) by 2018 from 64 billion baht at present.

While the core BDMS business remains hospital operations, which account for more than 90% of revenue, the group is moving into complementary medical areas. In September, it acquired a luxury hotel in central Bangkok to turn into an anti-aging wellness center, one of the first of its kind in Asia.

BDMS's other pharmaceutical arm is A.N.B Laboratories, Thailand's largest producer of steroids. Like Medicpharma, its focus is on marketing medicine to the general public, not just hospitals in the group.

Medicpharma is a mid-size player among over 100 Thai pharmaceutical companies. Exports to ASEAN generate about 10% of its revenue, and the plan is to push that to 30% by marketing to Australia, Europe, Japan, and the U.S.

Wissanu Assawes, the deputy chief executive of BDMS's non-hospital group and managing director of Medicpharma, told the Nikkei Asian Review that the company hopes to have a global presence and challenge Indian companies that control much of the global generic market. Authorities in Canada, the U.S., and other countries have recently banned some drugs from India on quality grounds. Big Indian players like Dr. Reddy's Laboratories, Lupin, and Sun Pharmaceutical Industries have been set back.

"We have Thai quality, which is already well received in ASEAN, plus relatively low labor costs," said Wissanu. The new facilities are of international standard with cleanrooms and a centralized air conditioning systems that precisely control air pressure, temperature, and humidity.

Wissanu said that the company will invite auditors from the European Union to inspect the new factory early next year. "It may take five years to achieve the certification for actual sales in Europe, but we want to start the procedures as soon as possible," he said.

Thailand is already well established as a medical tourism destination, with numerous high-end hospitals, but the pharmaceutical industry is something new. The country imports 100 billion baht in medicine each year, twice as much as it produces locally.

"I hope our new factory will support the government's plan to turn Thailand into a world medical hub," Wissanu said. "We want to help lower our dependency on medicine imports and make international standard medicine accessible for the Thai public."

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