Decoding Traphaco’s double-digit growth plan


In 2018, Traphaco plans to increase revenue and profit after tax of 20% and 25% compared to the previous year, 2 times higher than the average growth rate of the pharmaceutical industry.

Investors and analysts ask questions, on what bases for Traphaco to achieve this ambitious goal?

Traphaco’s business data shows that in 2017, the Company’s revenue reached 1,870 billion VND, equal to 94% of the year plan and increased 11% compared to the same period in 2016.

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The reason is that the Company adjusts its sales policy. Accordingly, the monthly and quarterly discounts for direct customers are deducted from sales. The discounted value is 160 billion dong after tax. Therefore, after adjusting this deduction, the Company completed the proposed plan. In 2017, the Company converted the contract with Nam Duong Investment Joint Stock Company into the form of a trust contract, so the revenue share with this partner decreased compared to 2016 (about 190 billion VND).

Profit after tax of Traphaco parent company reached VND 241 billion, up 14% from the previous year. Thus, revenue and profit of Traphaco in 2017 continue to maintain the double-digit growth momentum.

Profit after tax of Traphaco parent company reached VND 241 billion, up 14% from the previous year.

The plan set for 2018 with revenue and profit after tax of VND 2,400 and 300 billion, respectively, is an important step in implementing the sustainable development strategy of Traphaco until 2020 approved by Traphaco 2017 shareholder meeting. .

Analysts said that, in order to achieve this ambitious goal in the context of the fiercely competitive Vietnamese pharmaceutical industry, Traphaco will step steadily on both feet: traditional medicine and western medicine.

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The main group of traditional herbal products with brands that have affirmed their prestige and therapeutic effects such as Boganic, Cebraton, Tottri, Hoat Huyetu … continue to be strengthened to increase coverage and purchasing power. The room for this product group is not low growth, for example, in 2017, Tottri’s revenue increased by 48%.

In particular, Traphaco’s new product group, green health products (functional foods), have many opportunities when 2017 exceeded 20% of revenue compared to the plan, the group of consumers of green health products accounted for over 30%. 92% of the number of customers.

Traphaco sets a plan for 2018 with revenue and profit after tax of VND 2,400 and 300 billion, respectively.

The trump card to help Traphaco achieve its high growth target is also in the western medicine segment with the Traphaco Hung Yen factory which has been in operation since November 2017. Updated information from Traphaco’s management said that the factory was operating at capacity according to the set plans, and there were times when it had to mobilize workers to produce all 3 shifts. Many products such as Stilux, Dibetalic gastrointestinal drugs, Methorphan cough pills and syrups, and Tobramycine eye drops have grown rapidly in yield and coverage.

According to Mr. Tran Tuc Ma, General Director of Traphaco, the factory is invested synchronously and modernly according to EU-GMP international standards with the latest technology in the world, which will yield 3 times higher than the factory. Old technology of the same scale, helps to reduce unnecessary costs and reduce product costs. Resonant with the large distribution system that Traphaco has successfully built with over 26,000 pharmacies nationwide, allowing the company to produce on a large scale, high quality, especially to participate in hospital bidding packages. , boosting revenue from treatment channels.

Another advantage that cannot be ignored is the strength of Traphaco’s brand name. In the latest assessment of Vietnam Report, Traphaco ranked first in the Top 10 prestigious Vietnamese pharmaceutical companies in 2017. In today’s process of integration and technology, drug consumers have more and more proactive opportunities. In the choice of pharmaceuticals, pharmacies will only play an intermediary role in their decisions, the reputation of the business, the value of the brand is the foundation for the decisions of consumers.

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Observers showed that, in addition to production and financial capacity, Traphaco has strengths in marketing and brand communication. The company has early applied modern marketing tools such as digital marketing, regularly carried out communication campaigns to enhance the prestige of Traphaco’s brand, especially deepened into useful content, supplemented care knowledge. health, raising consumer awareness of the Company’s key products, contributing to maintaining good growth with these product lines.

The Traphaco Hung Yen factory has been in operation since November 2017.

There are two noteworthy details in Traphaco’s 2018 plan: the goal of adding 8 new products and creating a breakthrough in the Southern market. In 2017, in this potential market, Traphaco’s revenue increased compared to 2016 but still did not reach the target (reaching 94%). This is an opportunity and also a challenge, requiring Traphaco to make more efforts and develop new strategies to speed up and open a large business space.

A survey by IMS shows that Vietnam can produce drugs according to EU-GMP standards at a very competitive cost in the world, 30% lower than that of Indian pharmaceutical companies, 40% compared to Japan. Ban and 20% compared to China, mainly thanks to its specific advantages such as labor, good management .. Thus, besides the domestic market, Traphaco can step foot into the big sea by exporting.

The transformation of pharmaceutical enterprises from focusing on quantity to quality is becoming more and more clear and the advantage belongs to well-invested enterprises with the capacity to plan and execute strategies. Traphaco has continuously “refreshed” itself, to anticipate and seize new opportunities as well as to prove to the market that the sustainable development strategy to 2020 is on the right track.

He Tran Tuc Ma, General Director of Traphaco:

To create a successful pharmaceutical factory project is not only about installing a machine and operating it, but also having to decode parameters that are more important than what medicine the company will produce, how much, how to sell. Come on. Wrong product positioning, wrong pricing can easily lead to failure. Today, pharmaceutical production is not too difficult, but it is very difficult to sell products.

Khong Chiem
* Source: Partner

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