Asia-Pacific’s Life Sciences Boom

February 15th, 2017

As developing economies and aging populations fuel Asia-Pacific’s life sciences surge, healthcare logistics specialists help sector leaders revamp distribution networks.

Health and life science activity is surging across the world, but nowhere as strong as in Asia-Pacific, where growth rates average around 10% annually. But to meet that rising demand with maximum efficiency, pharmaceutical companies and other sector actors must re-think production and distribution strategies. Amid that restructuring to handle swelling import and export flows to, from and within the Asia-Pacific region, many companies are integrating healthcare logistics and transport specialists as veritable components of their supply chains.

One driver of that reconfiguration is the enormity of the AsPac region – which in life sciences includes India and Pakistan. Another is contrasting maturity and activities of individual markets, making them either bigger importers or exporters of medication – or, like China, enormous in both areas.

Countries with more mature health sectors like Australia, South Korea, Japan and Singapore serve as bases of research, production and distribution. So-called “pharmerging” nations like India, Vietnam, Malaysia and the Philippines boast burgeoning generic drug production. Those markets provide economical resourcing for export to pharmaceutical groups, awaiting blast-off of their own domestic medication consumption.

The sheer size of that activity – currently second only to North America – has led many sector actors to shift towards regionally accommodating structures.  As part of that quest to improve reactivity, enhance performance and cut costs through added value, leading companies are seeking the assistance and insight of healthcare transport and logistics specialists.

The first step in that is identifying logistics partners whose international certification and adapted structures respect cold chain and other requirements in handling medication. From there, companies often integrate those global supply chain service providers into distribution systems tailored to the maturity and demands of each market.

“It requires a real reformulation of clients’ distribution and healthcare logistic chains using regional strategies and enlisting specialists as integrated parts of that,” says Emmanuel Petrequin, Regional Healthcare Manager Asia-Pacific for Bolloré Logistics -- whose regional distribution center in Singapore renewed GMP and ISO13485 certifications for the next 10 years, and in February received IATA’s CEIV Pharma certification confirming its respect of cold chain and other strict standards required in handling fragile pharmaceutical goods.

“That involves us, for example, handling 14-15 million crates of bulk medication formerly shipped in as finished products, and processing them with value-added services like labeling, printing, inserting leaflet and instructions adapted to the health regulations of destination markets,” Mr. Petrequin explains. “We also locate other cost-saving solutions that may not occur to clients – such as using sea over air transport when possible. Sea is one-fifth the price and enhances respect of cold chain conditions, which is really a plus for non-government organization clients whose medication we transport from producers like India to African countries.”

Further adaptation and improvement is identified by logistics partners locally. South Korea has a mature life sciences market, but its fragmented distribution structure left international pharma companies facing confusing options that at times failed service quality audits. Better clarity and simplification became imperative.

Meanwhile, South Korea’s large aging “silver market” population has led many of the nation’s industrial conglomerates to invest in life sciences, considering it to be their next growth engine, even beyond the Korean market, after electronic products. That, and the government’s designation of life sciences as a strategic development sector, increased the urgency for pharma players to rationalize and improve structures, as well as to look to global supply chain service providers.

“Rather than dealing with an international transporter and a different local distributor, companies now are looking to use a globally selected service provider as a single partner, offering high quality standardized added value services and cost efficiency,” explains Thibault Janssens, Managing Director for Bolloré Logistics in South Korea, whose Seoul warehouse has been Generalized System of Preferences certified for medical goods.

That ability to provide clients with new solutions and enhanced performance necessitated healthcare logistics specialists not only identifying the looming boom in the Asia-Pacific sector, but investing to meet its requirements beforehand, too.

That was the logic behind construction of Bolloré Logistics’ new 10,000-square meter green warehouse in Melbourne, Australia, which includes a 250-square meter cold section dedicated to pharma products and is designed to roll all cargo and maximize handling safety.

“Melbourne is the example of moving in advance to offer clients solutions when they’re needed,” says Stéphane Armand, Pacific Director of Bolloré Logistics, whose Melbourne facility is one of six group warehouses operating in Australia and New Zealand. “Its combination of sustainability, automation, temperature control, security and added value services translates into higher quality performance for clients at lower cost. Everybody wins.”

Key Figures
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    of growth for Indian GDP in 2014

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    of growth for East Asian GDP in 2015, the world’s fastest-growing region

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    of growth in 2015 for Global Airfreight demand