With an impressive profit margin of 35-40 percent, Vietnam’s medical equipment market is viewed as a lucrative business by foreign distributors, the English language news portal VietNamNet Bridge reported.

By the end of 2013, Vietnam has had 1,069 hospitals, according to the General Statistics Office (GSO).

The figures are modest compared with the total population of 92 million. This means that Vietnam can provide only 25 hospital beds to every 10,000 people.

The lack of hospital beds and the improved living standards both have led to an increasingly high demand for medical equipment for newly built and upgraded hospitals.

In Ho Chi Minh City, it is estimated that 900 million USD will be spent on upgrading medical equipment at hospitals.

Meanwhile, there are about 50 medical equipment manufacturing companies in Vietnam, which can only make simple products.

A survey conducted by Espicom Business Intelligence, a subsidiary of Business Monitor BMI, showed that 90 percent of medical equipment available in Vietnam were imported.

Of this, 30 percent of the medical equipment import turnover was spent on imaging diagnosing equipments, including MRI machines, CT scanners, ultrasound equipment and X-ray machines, while imports from Japan, the US, Singapore, China and Germany accounted for 55 percent of the total value of imported medical equipment.

According to Espicom Business Intelligence, the Vietnamese medical equipment market has been growing very rapidly. The market value is expected to reach 1 billion USD by 2015 and 1.4 billion USD by 2018, while it was 634 million USD only in 2012.

The annual growth rate in 2013-2018 is predicted to reach 16.6 percent, far exceeding the world’s average growth rate of 7 percent.

However, Vietnamese spending per capita on medical equipment was modest at 7 USD in 2013, much lower than Thailand (12 USD), Malaysia (35 USD), Singapore (103 USD) and the world’s average level at 50 USD. Analysts believe the figure would double by 2018 to 14.5 USD.

The high growth rate has attracted more and more investors. Unofficial statistics show that about 1,000 companies operate in the field, while turnover for imported medical equipment has increased sharply.

In 2012, the Ministry of Health licensed 3,997 import orders, while the figure rose to 4,205 in 2013.

Regarding profitability, Le Van Huong, chair and CEO of JVC, a medical equipment joint stock company, noted that it was safe and profitable to make investments in medical equipment manufacturing projects.

He revealed that JVC’s gross profit was 35-40 percent, which is very high compared with the expected profitability in other business fields, according to VietNamNet Bridge.

Analysts noted that though the market is very lucrative, it is not large enough for all investors, and has been controlled by a small group of manufacturers and importers.

An unofficial report showed that in the biggest market share for imaging diagnostic market segment is held by JVC, while Siemens holds 30 percent. The remaining belongs to Philips, GE, Toshiba, Smith, Shimadzu and Gold Life.-VNA