OBG talks to Edward Ko, General Manager, Viva Pharmaceutical Brunei

Interview: Edward Ko

What were your main reasons for choosing Brunei Darussalam as a base for your $26m facility?

EDWARD KO: We have been looking to expand into Muslim countries and the transparent business practices in Brunei Darussalam make it a good site for our operations. We saw an opportunity here to leverage the strong reputation of the Brunei halal certification and so we invested in a halal pharmaceutical factory. We also realised that Brunei Darussalam is a very politically stable place, so we saw a healthy environment for us to expand.

How are you planning to capitalise on the growing halal market in the region, and what makes you bullish on the industry’s prospects?

KO: From our experience in the Middle East we see that our halal sales are strong and the business is growing. We see sales volumes increasing every year in countries like the UAE, Azerbaijan, Iran and Yemen. So we thought, why not build a facility that manufactures halal pharmaceutical products in the centre of a large Muslim population who already are avid halal consumers? Given that the Bruneian population is small compared to the overall Asian halal market, we will mostly be focusing on exports. Later we are also going to try to enter into the halal cosmetics arena as well.

What are the main challenges you have faced in trying to build up a local pharmaceuticals industry?

KO: We have started construction on the 9200-sqmetre first phase of our facility, which will focus on generic drugs (tablets and capsules), nutraceuticals (softgels) and cosmetic products. We have planned four production phases, but we are being conservative and holding off on the second, which will produce antibiotics, as this will require separate facilities. Also, Brunei Darussalam does not have the necessary wastewater treatment infrastructure to cater to an antibiotics manufacturing facility, so we would have to build our own. We’ve postponed the second phase until we can see more movement on the needed infrastructure.

The need to import construction materials also makes building costs higher here than in North America. Compared to projects of a similar size in the US, the costs in Brunei Darussalam are around 20% higher due to all materials being imported and the lack of advanced equipment. This may be an unfair comparison; construction in North America is different, because a lot of things such as warehouses are available in a standard, prefabricated form. What can be built in six months in Canada will take closer to 1.5 years in Brunei Darussalam and those delays can add a considerable amount to the final cost of the project.

It took six years before we started building our facilities, thanks in part to bureaucratic slowdowns to protect Brunei Darussalam, although the Ministry of Finance and the Brunei Economic Development Board have been quite efficient in working with us. If some red tape could be eliminated, it would greatly improve the ease of doing business here. Brunei Darussalam could follow the lead of other countries in the region such as Hong Kong, Taiwan and Singapore, which have developed high-quality infrastructure, like wastewater and water supply systems that can support a variety of projects. However, we chose Brunei Darussalam for the halal certification, whose credibility makes it worth taking on the other expenses.

How would you rate the quality of local human resources available for the sector?

KO: The pharmaceuticals production industry in Brunei Darussalam is completely virgin, and this is reflected in the pool of human resources available. It’s difficult to find a broad range of professionals in the industry at present, but we plan to change that.

We are going to recruit local people with degrees in chemistry or pharmaceuticals for managerial training. In the first five to six years we will bring in people from outside who will train local managers. After this period, the local managers will be able to handle the workload and manage the factories by themselves.