Report From: Vietnam

Report from: Vietnam

The ink has barely dried on Vietnam's newly approved biotechnology plan, and the government already has given the green light to Irish property developer Paddy McKillen to develop the first phase of a $1-billion biotech park in Hanoi. The country's "General Plan for Developing and Applying Biotechnology in Vietnam until 2020" is part of its ongoing efforts to develop a profitable biotech sector that can contribute to economic growth. Under this plan, the government will play an instrumental role in establishing biotech business and creating favorable markets for foreign investors over the next several years, with the goal of being able to compete with its Southeast Asian neighbors by 2020.

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Biotechnology is a priority in Vietnam due to its wide range of biological resources and heavy reliance on agriculture. The country's green biotech sector has been quite successful to date, with products such as year-round pineapples and high-yield rice varieties, according to Jamie Davies, analyst and head of pharmaceuticals at Business Monitor International (BMI). Compared with neighboring Malaysia, another agriculturally focused country with a population of 27 million, Vietnam has the added advantages of a population of 80 million and close proximity to the Chinese market.

Building on its agricultural success, Vietnam is now exploring the development and application of biotech to new areas. These areas include forestry, fishery, food processing, hygiene, health, the environment, and of course, pharmaceuticals and medicine.

Foreign investors are beginning to notice Vietnam's biotech development. Many have expressed interest in setting up facilities in Saigon Hi-Tech Park, established in 2002. NuGEN (San Carlos, CA), a manufacturer of medical equipment and diagnostic rapid-test devices, has committed $1 million to establish a 14,435-ft² facility in the premises. The first major foreign-invested biotech project in Vietnam, NuGEN is collaborating with Pasteur Institute and HCM City Pasteur Institute (Ho Chi Minh City) to develop the rapid-test technology. Other companies such as Canadian-based Novatek and Malaysian-based Teguh Pharma are joining forces to leverage their knowledge and expertise of current good manufacturing practices and software to increase clientele in the country.

In the longterm, Vietnam hopes to manufacture a new generation of vaccines with a target of producing 80 million doses per year by 2010. Hanoi-based Vabiotech is already making headway with a vaccine, currently in human clinical trials, to cope with a potential bird flu epidemic instead of seeking treatments such as Tamiflu (Roche, Nutley, NJ) which would prove too costly for Vietnam's huge population.

Davies points out, however, that support from the private sector is essential to grow the country's biotech sector and to avoid state funding and intervention. "The next milestone is for local firms to diversify from small-molecule generics into affordable biosimilars, which may result in innovative biopharmaceuticals," he said. "However, this is extremely high value [in terms of profit margins] and may take 15 years" to see any progress.

Other obstacles stand in Vietnam's way as well. The country is plagued by poor infrastructure; a lack of regulations, incentives, and scientific talent; as well as intellectual property and biosafety issues. Dr. Bui Ba Bong, vice-minister of agriculture and rural development, emphasizes the need to implement intellectual property rights, biosafety regulations, and controls as they are essential to promote the use of modern biotechnology in Vietnam. Compared with its Asian counterparts, the country has been slow in setting up a biotech framework because of a lack of knowledge and expertise.

In addition, Vietnam does not have a strong capital base as does Singapore, or the huge talent pool of India and China. The country has yet to come up with an attractive palette of tax incentives to woo foreign investors the way Thailand has in the form of an eight-year full tax holiday and another five-year 50% tax break.

Despite these limitations, Vietnam's biotechnology sector remains a beacon of hope for the nation, and for Asia, as the government strives for improvement. Part of the general plan for 2020 includes formulating regulations for safe research, management, production development, and imports and exports of genetically modified organisms. To ensure safety in laboratory testing, the government has further enforced regulations in institutions such as the Institute of Biotechnology and Institute of Tropical Biology.

The nation is expanding its talent base in two phases: The first aims to have more than 8000 scientific graduates and postgraduates between 2006 and 2010; the second involves training another 12,000 scientists between 2011 and 2015. The government is increasing funding for research as well. The Ministry of Science and Technology has committed nearly $15 million to be distributed equally to five national laboratories.

In addition, Vietnam is setting up a network of high-capacity research organizations for technology development at the Association of Southeast Asian Nations level. Under the 2020 plan, the government has devised programs that involve extensive research and application into areas such as gene-, cell-, enzyme-, protein-, and micro-biotechnology.

On the whole, Vietnam's biotech sector is poised for growth given its current state of planning and development. Without a doubt, its progress will boost the economy in terms of job opportunities and foreign investment as the government commits to increase the sector's competitiveness and global market access.

Jane Wan is a freelance writer based in Singapore.