Up to 90 percent of local veterinary medicine producers could be forced to close down by the end of the year, because they have failed to acquire Good Manufacturing Practice (GMP) certification.
According to the Department of Animal Health decision made in 2005, all manufacturers of liquid veterinary medicines must pass GMP standards by the end of 2008.
A recent report from the department said, only eight out of a total of 87 producers have been given GMP clearance so far, while 65 companies were too small to afford the cost of certification, which could cost around US$1 million.
The head of the animal health department, Bui Quang Anh, said they could not change the deadline because GMP was one of Vietnam’s commitments as a World Trade Organization (WTO) member.
The report said the failure of the small companies to comply was a result of their financial incompetence and lack of human resources.
Most veterinary medicine manufacturers had less than 30 staff and grossed between VND10 million ($632) and VND100 million ($6,319) a month.
Anh said only companies with 100 to 400 workers and monthly revenues of billions of dong were able to join the GMP “playground.”
Hanoi-based Hanvet Company Director Nguyen Huu Vu said they were building a GMP standard plant with an expected investment of about VND70 billion ($4.4 million).
The plant’s electricity costs were estimated at VND300 million ($18,957) per month, while non-GMP plants only paid VND25 million ($1,579) a month for power, because their production lines were manual rather than automated, Vu added.
He also said salaries for qualified staff was another major expense which non GMP plants could not afford.
Vietnam Association for Veterinary Production and Trade Vice Chairman, Vu Huy Tan, said, to acquire a GMP certificate, a producer needed at least two and a half years: one year to apply for land, six months for consultation and a year to build a new plant.
“It is the companies that want to delay the GMP process. They have kept delaying until they can not delay anymore,” Anh said.
The small companies asked the department to extend the deadline for another four years, but their request was denied.
According to Anh, Vietnam would need 20 to 22 veterinary medicine manufacturers which exceed GMP standards.
He said they would account for 80 percent of the market share so there was no need to postpone the deadline.
GMP standards improve the quality of the medicines, making a better product for export.
He predicted, however, that only two or three manufacturers would be granted GMP certifications by year end.
Manufacturers’ views
Most manufacturers said they hadn’t acquired GMP certification because the department failed to give them guidelines.
Vietnam Association for Veterinary Production and Trade Vice Chairman Nguyen Ngoc Thu said, “GMP is necessary, but the producers are waiting for a relaxation of the standards.”
In their proposal for a deadline extension, Hanoi’s veterinary medicine producers said complying to the standards would cause their products to double or quadruple in price, which was not competitive.
They said most small and medium companies would close down if the department insisted on GMP certifications for liquid medicine manufacturers by 2008, because liquid medicines accounted for 60 to 70 percent of their lines.
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