LVMH Holdings Establishes Joint Venture with Donggu BioPharm

[Asia Economy Reporter Jang Hyowon] LVMCHoldings announced that it has officially entered the healthcare market by signing a 'Joint Venture (JV) Establishment Agreement' with Dongkoo Bio & Pharma, a company with excellent pharmaceutical development and manufacturing know-how, on the 23rd.

The two companies plan to establish a pharmaceutical manufacturing plant in Laos to produce and supply K-Generic (generic drugs) and expand their total healthcare business to Southeast Asian countries including Laos and Korea.

On the 23rd, the joint venture establishment signing ceremony was attended by Donggu Bio Pharmaceutical CEO Yongjun Cho (left) and LVMCHoldings Chairman Seyoung Oh (right). / Photo by LVMCHoldings

Dongkoo Bio & Pharma is a company with excellent pharmaceutical development and manufacturing expertise accumulated through its CDMO (Contract Development and Manufacturing Organization) business. It has a diverse product portfolio including gastrointestinal, cardiovascular, antibiotic products, dermatological drugs, antifungal agents, urogenital drugs, and allergy medications. Currently, based on prescription amounts, it holds the number one market share in the dermatology and urology sectors as a specialized pharmaceutical sales company.

The joint venture agreement between the two companies specifically includes ▲establishing a Korean pharmaceutical manufacturing plant in Laos ▲exporting K-Generic pharmaceuticals to Korea ▲jointly promoting new businesses to enter and secure a leading position in the ASEAN-centered total healthcare industry.

In Laos and neighboring Indochina Peninsula countries, it is common to purchase medicines at pharmacies without prescriptions to reduce costs rather than visiting hospitals. A former vice president of three pharmaceutical factories under the Laos Ministry of Health once mentioned, “Korean pharmaceuticals are excellent, but compared to pharmaceuticals produced in ASEAN (especially Thailand) and China, they have lower price competitiveness due to high tariffs and logistics costs.”

Through this collaboration, Dongkoo Bio & Pharma will apply its excellent manufacturing facilities and technical know-how to the Laos production plant, securing price competitiveness by reducing manufacturing costs and enhancing export competitiveness to Korea and ASEAN countries. LVMCHoldings will focus on creating additional revenue sources and expanding sales through its entry into the healthcare industry.

An LVMCHoldings official stated, “Through this opportunity, the two companies will be able to supply excellent products to Laos and neighboring countries at reasonable prices, thereby meeting market demand for Korean pharmaceuticals,” adding, “Especially since the ASEAN Economic Community (AEC), formed by the 10 ASEAN member countries since 2016, has eliminated tariffs, Korean pharmaceuticals have already secured competitiveness in exporting to Southeast Asian countries.”