Business

Friday February 13, 2009

Stable demand to help YSP sustain earnings

By YEOW POOI LING


MD: Healthcare industry resilient through boom and bust cycles

KUALA LUMPUR: Healthcare company YSP Southeast Asia Holding Bhd expects to sustain earnings this year because demand for its generic prescription drugs is stable, said president and group managing director Datuk Dr Frank Lee Fang Hsin.

“Prescription drugs contribute the most in revenue; hence we’ve not been significantly impacted (by the crisis) in terms of demand for our products,” he told StarBiz in a recent interview, adding that the healthcare industry was relatively resilient through boom and bust cycles.

However, Lee said the demand for its over-the-counter (OTC) products sold at pharmacies had been more affected by the economic slowdown.

YSP’s good track record in prescription drugs had resulted in repeat orders from clients, he added.

Datuk Dr Frank Lee Fang Hsin

“It’s important to maintain quality and offer aftersales service for prescription drug customers.

“It takes an average of three years to build a brand and YSP has successfully built a solid track record among its clients.

“This gives us a competitive edge instead of just competing on pricing,” Lee said.

In addition, the company has been able to control costs and inventories with its own production facilities.

This year, YSP planned to launch a new product line called “Sinari,” a halal-certified health supplement, he said, adding that the prescription and OTC segments would each see five new products this year.

The company’s balance sheet remains healthy with a manageable gearing ratio at 0.12 time, according to Lee.

YSP is also planning to restart its operations in Vietnam in the second quarter.

“We postponed the construction of the Dong Nai plant last year because of the escalating building material costs.

“On hindsight, it was the right thing to do,” he said, adding that the Vietnam operations would initially focus on veterinary products catered mainly for livestock, after which, prescription and OTC products would be introduced.

The company’s new facility in Bangi to produce injectables and eye-drops would take another one to two years before production could start due to the safety measures that needed to be in place, Lee said.


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