Hovid targets 1st overseas plant by 2013

August 15, 2010

KUALA LUMPUR, Aug 15 — Pharmaceutical company Hovid Bhd expects to build a new plant overseas by 2013 to cope with the strong demand for its products, said managing director David Ho.

Ho said Hovid, which has presence in over 50 countries, will have more options to consider (building a new plant) because the countries wanted the company to invest instead of being an exporter.

“We do see that if we have a plant, we will not just be an exporter but will have a local presence. That will boost our growth in those markets,” Ho told Bernama in an interview recently.

He said the plants were currently running at 100 per cent capacity and Hovid was waiting to see whether demand for its products was sustainable before increasing their capacities.

“If we really cannot ‘squeeze’ more out of the plants, then I think it would be realistic to set up a new plant,” he said.

Hovid, a Perak-based company, started off as the well-known Ho Yan Hor Herbal Tea in 1940s and was transformed into a pharmaceutical company in 1980s.

Hovid, which has two plants each in Ipoh and Chemor, is involved in the development and manufacturing of generic drugs, dietary supplements and consumer products.

Hovid is proud of its patented bio-enhanced delivery system and its continuous research and development to develop the technologies to improve bio-availability.

According to Ho, at a time when many African countries were also asking Hovid to set up a plant it was also considering Asian countries namely, the Philippines and Indonesia, as an option.

Ho said the company was also looking at China to enable it to have an immediate access to the Chinese market and export network to the world.

“The company has yet to have a presence in China because it is complex and importing pharmaceutical products from China is difficult,” he said, adding that the company was looking forward to working with the local partners.

He said Hovid may enter the Chinese market with its herbal tea products first because its brands were well-known in China, especially in the southern parts.

Ho said the company was also looking at Europe and was currently in discussions with a few companies.

“The company may enter the market with a health supplement products,” he said.

He said Hovid has a presence in India after it bought into an Indian-based company.

“The purpose is to use the capacity for export as well as to fill up some of the gaps that are tight in Malaysia. The Indian generic market is competitive.

“We are also looking to work with local partners where they have distribution networks. We will go into India’s over-the-counter healthcare market and so far we had discussions with a few companies,” he said.

On the performance for financial year ending June 30, 2011, Ho said the company has projected between 10 and 20 per cent revenue growth, driven by growing overseas demand.

For the third quarter ended March 31, 2010, Hovid’s pre-tax profit jumped to RM15.29 million from RM1.95 million in the same period last year, while revenue was higher at RM107.1 million from RM80.1 million previously.

The results for the full year ending June 30, 2010 will be released at the end of this month.

Ho said there was a dark cloud hanging over the palm biodiesel industry.

However, he said, subsidiary, Carotech Bhd, was turning around and expected a reasonable profit for this year and positive result for 2011.

“For the first nine months ended March 31, 2010, Carotech’s revenue rose to RM190 million from RM90.2 million in the same period previous year,” he said.

Carotech is the only good manufacturing practice-certified and largest producer of natural tocotrienol (Vitamin E from the palm oil) and mixed palm carotenoids (Pro-Vitamin A from the palm oil) in the world.— Bernama