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Cambodia Pharmaceuticals and Healthcare Report Q4 2011
Cambodia will continue to remain unattractive to foreign pharmaceutical
investors given its widespread corruption and low per-capita healthcare
and pharmaceutical expenditure. Over the longterm, we expect
pharmaceutical companies to take a greater interest in the country as
they look for highgrowth frontier markets. However, this decision still
depends on whether the government actively tries to improve its
political situation and regulatory regime.
Headline Expenditure Projections
.. Pharmaceuticals: KHR812.33bn (US$194mn) in 2010 to KHR894.03bn
(US$217mn) in 2011; +10.1% in local currency terms and +11.6% in US
dollar terms. Forecast unchanged from Q311.
.. Healthcare:
KHR3,036bn (US$725mn) in 2010 to KHR3,295bn (US$798mn) in 2011; +8.5% in
local currency terms and +10.1% in US dollar terms. Forecast down
slightly from Q311 due to macroeconomic factors.
.. Medical
devices: KHR47.15bn (US$11mn) in 2010 to KHR51.06bn (US$12mn) in 2011;
+8.3% in local currency terms and +9.8% in US dollar terms. Forecast
unchanged from Q311,
Business Environment Rating
Cambodia
continues to rank last of the 18 pharmaceutical markets surveyed in the
region with a significantly lower than region's average score (53) of
31.4 out of the maximum 100. We believe it will remain one of the least
attractive markets in the region, primarily due to low per-capita
expenditure on healthcare, widespread corruption and the lack of a
structured regulatory process.
Key Trends & Developments
..
In September 2011, Cambodia started a pilot project to contain the
spread of malaria via text messaging and web-based technology. The
project cut down the amount of time needed to report such
epidemiological data to the district health level.
.. In the same
month, India-based Himalaya Drug partnered with Thailand-based Berli
Juncker to set up a plant in the country. Through the free trade
agreement among South East Asian countries, its products will also be
exported to Cambodia, Indonesia, the Philippines, Malaysia and
Singapore.
Economic View
Visitor arrivals to Cambodia
surged by 19.0% year-on-year (y-o-y) in May 2011, indicating that the
government's full-year target of 2.8mn visitors remains on track. We
remain optimistic that visitor arrivals should continue to increase over
the coming months. Government initiatives to attract more visitors to
Cambodia are proving to be effective and cooling tensions at the Thai
border also suggest that cross-border tourism between the two countries
should continue to recover.
Political View
The issue of
forced land acquisitions by urban elites from rural dwellers will
continue to undermine Cambodia's risk profile for the foreseeable
future, and could lead to a further deterioration in relations with
external donors. However, the backlash against land seizures does not
seem to be a regime-threatening phenomenon, and Cambodia will continue
to receive strong support from China.
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