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Myanmar's Soaring Health Sector Prompts Medical Supplier Goldrush

Viewed as the last frontier by many in the commercial sector, Myanmar's government-backed healthcare boom is the latest element of the country's economy to see countless international manufacturers and suppliers Yangon-bound.

Photo: On the mend: Healthcare in Myanmar has been transformed over the past five years. (Shutterstock.com/Tooykrub)
On the mend: Healthcare in Myanmar has been transformed over the past five years.
Photo: On the mend: Healthcare in Myanmar has been transformed over the past five years. (Shutterstock.com/Tooykrub)
On the mend: Healthcare in Myanmar has been transformed over the past five years.

The combined offer of two tradeshows – Myanmar Phar-Med and Dental Myanmar – both focusing on potentially lucrative and underserved sectors, proved an irresistible lure for many global medical suppliers keen to get a foothold in the untapped Myanmar market.

Quite upfront as to why his company was keen to show its wares in Yangon, Myanmar's largest city, Hyunjoo Park, the International Sales Director for Daihan Scientific, a South Korean specialist in laboratory testing equipment, said: "Not so long ago, the fastest-growing demand for healthcare services came from the developed countries of the West. It then shifted to number of the Asian nations, most notably Japan, China and Korea.

"Now we think the focus is moving again, with higher levels of demand stemming from the ASEAN bloc. In line with this, we think the time is right for us to expand into countries such as Thailand and Myanmar, which explains why we are here and why we are looking for a local distributor."

Established in 1980 in the city of Wonju, 140km east of Seoul, Daihan already has franchise operations/distribution deals in a number of locations, including Shanghai, Istanbul and Taipei. It primarily focuses on the manufacture of a range of medical products, including open incubators, autoclaves, freezers and glassware.

Travelling from slightly further afield was BioLab. Based in the Picardy region of northern France, the company currently has distribution deals in 80 countries for its range of reagents and analysers. Explaining why he believes it is now the right time for the company to target the Myanmar market, Export Sales Manager Axel Rodella said: "We supply a wide range of products, including reagents and analysers for medical testing, all of which are targeted at the needs of local laboratories.

"In accordance with our global strategy, we are now looking to expand our footprint into Myanmar and throughout the rest of the ASEAN bloc. In line with this, we have already established operations in Vietnam and Laos."

Another hopeful newcomer to the Myanmar market was Joinsoon Medical Technology, a Taipei-based manufacturer of diabetes diagnostic devices. Acknowledging the role that state support is playing in attracting overseas medical suppliers, Sebastian Hofstede, the company's Sales Manager, said: "While we are not that familiar with the Myanmar market, we are aware that it is opening up and growing fast.

"This is partly because the Myanmar government is providing subsidies to hospitals, while actively looking to ensure wider access to an improved level of healthcare. For our part, it is particularly appealing, as a number of our production facilities are covered by trade agreements that give us relatively straightforward access."

No matter how obvious the opportunities were, however, many of the exhibitors were only too aware of the importance of securing the services of an experienced local distributor. Only when such a partnership had been agreed, it was believed, could the various idiosyncrasies of the local market – and the required import/export procedures – be successfully negotiated.

Underlining the importance of such an arrangement, one local distributor – who preferred not to be named – said: "Nowadays, although people definitely have a higher level of disposable income, many of the government procedures remain unchanged and can seem offputtingly complex.

"While most importers have no real problems with the import taxes, they find the delays in getting things processed and the excessive paperwork hugely frustrating. As a result, many importers choose to import via the border areas, bringing goods in illegally and skipping the paperwork altogether. In the case of European imports, for instance, they are often initially dispatched to China, before arriving here in a more surreptitious fashion."

Photo: Domestic diagnostics: Right Laboratory.
Domestic diagnostics: Right Laboratory.
Photo: Domestic diagnostics: Right Laboratory.
Domestic diagnostics: Right Laboratory.
Photo: Myanmar Phar-Med 2017: A healthy market.
Myanmar Phar-Med 2017: A healthy market.
Photo: Myanmar Phar-Med 2017: A healthy market.
Myanmar Phar-Med 2017: A healthy market.

For many of the overseas companies already operating in the country, the excessive red tape required for the registration of any foreign-made product, such as pharmaceuticals, has also proved to be an impediment to growth. One company with direct experience of this is India's Hiral Labs, which has been manufacturing pharmaceutical products since 2000 and now has four distribution deals in place across Myanmar. To date, its big sellers have been citicoline – a recognised treatment for stroke patients and a number of dementia-related syndromes – and a range of antibiotics. Another of its most popular items is disulfuram, a treatment for chronic alcoholism.

Recounting the various brushes with Burmese bureaucracy experienced by the business, International Sales Manager Alfia Saiyed said: "Some seven years ago, we decided to move into the export markets. At that time, overseas traders were buying pharmaceuticals from our operations in India and then selling them into other markets. In the case of those markets, such as Myanmar, that directly border India, we decided to launch our own direct sales operations.

"As the local people trust Indian drugs and find them very affordable, sales have been really good and we are now looking for more distributors. From our point of view, the only really big drawback has been that it takes between 18 months and two years to get a pharmaceutical product approved in Myanmar.

"Although we have started the process for a few of our drugs, by the time we get approval from the local equivalent of the FDA several years down the line, we have no idea what the market value of these product will be at that point."

Another company seemingly familiar with the peculiarities of the Myanmar market was Shanghai-headquartered Hitec Medical, a manufacturer of a wide range of medical disposables, with a specialisation in urology, anaesthesia and respiratory products. Making its second visit to these two trade shows, the company, which already exports to 62 countries, was particularly keen to find additional distributors.

Expanding upon its plans, Jackie Sheng, the company's Managing Director, said: "We have an extensive range and we are keen to expand our business here. Every hospital requires our kind of disposable products, while our particular appeal lies in the consistently high quality of all of our ranges and our competitive pricing."

Although overseas companies dominated the expos, much as they do in the country's overall medical sector, there was still room for a number of domestic businesses, including Right Laboratory and Health Screen, a local medical diagnostic laboratory that first opened its doors back in 1997.

Evaluating the company's success to date, Technical Manager Zin Min Htike said: "We primarily provide laboratory and clinical services to individuals. Overall, business so far has been very good for us, partly because of the investment into healthcare made by the government."

With regard to the dental-equipment market, it seems to be largely driven by many of the same dynamics as the broader medical sector. Overall, demand for dental services has grown rapidly, largely on account of the free clinics and the educational programmes run by several of the country's NGOs, including the Dental Health Care Foundation.

Outlining the Foundation's remit, Dr Aung Than, the charity's President, said: "Our mission is to provide free dental treatment and oral screening, as well as to supply the elderly with dentures. We are a largely self-funded private organisation and currently have 20-30 dental surgeons and dental nurses on our books. As we travel across the country, providing free treatment at our clinics, we also distribute toothpaste and tooth brushes as a way of promoting dental hygiene.

"Overall, the level of dental care available is improving rapidly. In 1965, there was only one dental college in the whole of the country. Now, there is also one in Mandalay, as well as a separate military institute. When I started out, only about 20 dental surgeons qualified every year, now it's more like 4,000."

Providing more of a private sector perspective was Htet Paing, Managing Director of the Yangon-headquartered Biodent Dental Laboratory Group, which runs three high-end dental clinics and a dental laboratory. Taking an overview of the recent changes to the sector, he said: "Compared with just five years ago, the market has been transformed. People have more money to spend and hospital dental services are getting a higher level of government funding. As a result, the market is booming.

"Patients are also far more knowledgeable when it comes to dental care. This has led to far greater demand for aesthetic dentistry procedures, such as orthodontics and cosmetic dental surgery."

Photo: Daihan Scientific: Seeking local distribution.
Daihan Scientific: Seeking local distribution.
Photo: Daihan Scientific: Seeking local distribution.
Daihan Scientific: Seeking local distribution.

Myanmar Phar-Med 2017 and Dental Myanmar 2017 took place from 5-7 July at the Rose Garden Hotel in Yangon.

Geoff de Freitas, Special Correspondent, Yangon

Content provided by Picture: HKTDC Research
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