Mega Lifesciences builds another Australian factory
Mega Lifesciences Plc, a Thai pharmaceutical company, has built a new factory in Australia to supply its medicines and food supplements to 30 countries.
Chief executive Vivek Dhawan said sales growth in Thailand’s pharmaceutical industry remains high, 30% yearon-year in the first half despite the economic slowdown and beating 20% growth in some markets.
‘‘We see a bright outlook for the pharmaceutical business in Thailand and 29 other markets. These include developing countries such as Azerbaijan, India, Myanmar, Cambodia and Vietnam, all of which have especially high demand for prescription and over-the-counter (OTC) medicines,’’ he said.
To serve these markets, the new 200-million-baht Australian factory raises the company’s overall annual production capacity to 650 tonnes of powders, 13 million hard-gel capsules and 155 million tablets.
Mega Lifesciences has two other plants, in Thailand and Australia.
The Australian pharmaceuticals market is strictly regulated, making the country a centre of excellence for the devel- opment of powders, tablets and chewable pills.
Mega Lifesciences earmarks 1.5% to 2% of its revenue for product development.
At present, it has 627 active prescriptions, with another 138 products in the pipeline — 59 under development and 79 undergoing registration.
Its revenue comes from three areas — Mega We Care, its own brand, contributing 46% of revenue; Maxxcare, an international distribution operation for Myanmar, Cambodia and Vietnam, also contributing 46%; and the rest from original-equipment manufacturing for other pharmaceutical brands.
Mr Dhawan said his company will try to build stronger brand awareness for Mega We Care OTC drugs and food supplements.
Food supplement sales are rapidly growing in Thailand, particularly of vitamins C and B and fish oil. This trend is expected to continue rising as Thailand becomes an ageing society.
Mega Lifesciences will also form partnerships with 10,000 independent drug stores and chains.
It expects 20% revenue growth to US$200 million this year.
Veteran Jim Patterson has worked in the cinema industry in seven countries and has seen all the problems facing the business. Indonesia, for example, has a monopoly on all 21 cinemas. In Malaysia, one big player keeps prices down, making it difficult for others to compete. Rents in Myanmar have skyrocketed in the last two years and it is hard to find a good location with a reasonable rent.
In Thailand, cinema operators do not have to worry about bureaucracy such as government permits. More importantly, Thais like to see movies.
For Mr Patterson, director of business development at Major Cineplex Group, a big challenge is that some Hollywood films do not work well with Thai moviegoers.
The process prior to screening movies includes signing contracts with distributors on how many screens the movie will be aired on. Trailers are shown, but some movies are disappointing and some exceed expectations.
‘‘Certain movies don’t play well in Thailand such as Academy award winners like The King’s Speech and Argo. Last year the biggest bomb was John Carter. Its performance was just dismal,’’ said Mr Patterson, also general manager of Paragon Cineplex and Imax.
The American sense of humour often struggles to get laughs in Thailand, and many times Thais just don’t get it, he said.
Major also produces movies, and it recognises the need to work on the development of Thai films — get better ones to fill in the blanks when there are no good ones showing.
About 70% of movies shown at Major Cineplex, the country’s largest cinema operator, are from Hollywood and 30% Thai. Mr Patterson said he aims for a 60:40 or 50:50 ratio.
‘‘Thailand has to produce more good movies. If we could get more, it would ease the risks. If we don’t have nonHollywood films, we will have a problem,’’ he said.
Phi Mak Phra Khanong, a 2013 comedy-ghost film that earned ticket sales of 1 billion baht in Thailand and also screened internationally, has by far been the highest-grossing Thai movie, Mr Patterson said.
While Major plans to expand cautiously in the region, its priority remains the Thai market. With revenue of 6.97 billion baht last year and a net profit of 811 million baht, Major has a market share of about 70%.
The group operates six brands under its cinema business, which accounts for half of its total revenue, and has 450 screens in Thailand. It aims to increase the amount to 1,000 in 5-6 years, adding 100 screens each year.
‘‘Some theatres kind of get emotional and go into countries and buy for strategic reasons. We don’t do things that don’t make economic sense. In Thailand, we can control expenses and we know the market,’’ Mr Patterson said.
One cinema operator with an expansion strategy is South Korea’s CJ CGV, which acquired Vietnam’s Megastar chain in 2011 and Indonesia’s Blitz Megaplex last year.
‘‘If the price is based on performance and we can improve what we can do [we might consider purchasing]. But it’s hard to find companies like that and CJ paid a lot,’’ said Mr Patterson.
Major’s 40 cinemas in Thailand are joint ventures with CJ, which is among potential partners for Major to set up a 150-million-baht cinema in Cambodia at the Aeon Mall in Phnom Penh, with Major controlling the stake.
Cambodia has seven cinemas that generate high margins. Despite that, Major plans to include bowling lanes in its new venue. Last year, bowling and karaoke contributed 7% of Major’s revenue.
‘‘When we opened Blu-O in India, everyone thought we were crazy, because Indians don’t bowl. But in fact, it’s easier to do bowling, because no one is doing it well,’’ said Mr Patterson.
‘‘Generally, people do bowling for bowlers, and that’s a mistake. We do it with lighting. The demand is parties, fluorescent lights and disco music, so we make it quite different.’’
In Thailand, it costs 10-15 million baht to open a cinema screen and more than 100 million for a bowling venue.
Major is pursuing five bowling and cinema projects, with negotiations going on in Cambodia, Indonesia, Vietnam and Myanmar.