Nipro starts work on new US$300 million facility in Vietnam

The US$300-million plant is meant to increase the company’s capacity to meet the growing demand for medical equipment and build a more stable supply system.

According to Nipro’s announcement, the company targets a consolidated net sales of JPY500 billion  (US$436 million)  by 2020 and JPY1 trillion by 2030. 

The wholly-owned subsidiary called Nipro Vietnam Co., Ltd. found an ideal location in Ho Chi Minh City, due to its suitability for export-import activities and abundant young workforce.

Nipro Vietnam will be established with a chartered capital of US$70 million and is planned to start operation on October 30. As mentioned before, the total investment value will be US$300 million including the plant that will look to produce for domestic and international customers.

Information published on Nikkei Asian Review claims that the facility will produce catheters, blood tubing, and other products for dialysis. Previously, Nipro has relied on a Thai subsidiary in this business line, but has decided to sate the growing demand for dialysis treatment products via a new facility in Vietnam.

In late 2016, Nipro got a license for the US$300 million project in SHTP, after investing US$150 million in the first plant in northern Vietnam.

"The project will focus on research and development (R&D), and medical equipment production. If everything goes smoothly, the project is likely to be kicked off in 2017," said Le Bich Loan, deputy chairwoman of the park’s (SHTP) Management Board.

The Osaka-based company said Monday that within three years, it will build the factory and install production equipment for around US$190 million. Output is to begin in October 2018. Plans call for investing another US$110 million or so through 2025 in additional capacity at the plant.

The factory will make catheters, blood tubing and other products for dialysis for sale mainly in Japan and to a lesser extent Southeast Asia. Nipro has relied on a Thai subsidiary to produce for these markets. 

The new project at SHTP is not Nipro's first project in Vietnam. In 2012, the firm kicked off its first plant in the northern port city of Haiphong, and began operation in 2015. The Japanese firm is also planning to enlarge its production activities in the city in the near future to serve the growing domestic demand.

According to VIR source, the Haiphong site of Nipro Pharma Vietnam has an area of approximately 150,000 square metres, equivalent to 18 football fields. The firm has so far used just 30,000sq.m, and will develop the rest soon for domestic sales.

Nipro made the move following the expansion of the global healthcare group Sanofi and B.Braun, Germany's biggest pharma and medical equipment producer.

In late 2015, Sanofi inaugurated its third plant worth US$75 million in Vietnam. Its other two plants, also in Ho Chi Minh City, are now running at maximum capacity, but they have not been able to keep up with demand.

Currently, 80% of Sanofi’s products manufactured in Vietnam are sold in the domestic market, and the rest are exported to other Asian countries.

Seeing the potential of the local medical equipment market, B.Braun plans to invest an additional US$270 million in some new projects in Vietnam in the next years. 

B.Braun Vietnam began operating the first phase of its medical equipment production in Hanoi in 2011 with the total investment capital of US$54 million. After three-year operations, the firm's revenue reached US$72 million in 2013. 

In 2014, the German firm decided to invest an extra US$50 million in the second phase of the project to meet local growing demands.