With the Asia Pacific expected to grow by 97 per cent and account for 29 per cent of global pharma sales by 2016, Envirotainer’s increased investment in Asia is part of its strategy to lead the market and to build on its already-strong partnerships with healthcare companies and their airline and logistics partners across the region, said Gustaf Ljunggren, CEO of Envirotainer. “The Singapore office will improve access to Envirotainer’s active temperature-controlled air cargo containers and cold chain management services in the region,” he said.
“The global pharmaceutical companies entered Asia 10 years ago but the acceleration of research, development and manufacturing seen in the last 2-3 years is unparalleled compared to that of earlier years,” Ljunggren said. “Driven by its large population, growing economies and improved access to life saving medicines, the Asia Pacific region is expected to see substantial growth in the coming years thanks to these changing market conditions and access to lower cost manufacturing.” And the increasing shift to Asia of clinical drug trials is another key factor, he added.
Speaking to Payload Asia at the opening of the Singapore office, Ljunggren – who took over the helm of the Swedish cool chain container specialist in May this year – said the decision to establish a regional office was driven by the need to be closer to customers and partners. “What’s happening in Asia as a whole is extremely important for us. We have seen it from a distance, but we need to be present in the local markets – you can’t handle your partners and customers from a distance.”
And the choice of Singapore was a clarion call he added. It’s not only a hub for many of Envirotainer’s partner airlines and an efficient logistics hub, but more importantly it has the density of a huge number of pharmaceutical companies – both the global giants and the smaller regional companies. “If we go where the global players are it makes life for us a little bit easier because we already have them as customers, they are used to our products and our services.”
“Having the combination as there is in Singapore, for us was the perfect match.” Having a dedicated cool chain facility such as the Coolport@Changi was also a plus factor, not so much for the facility itself, but rather because “we see that the authorities and the country understand and are serious about the cold chain business”.
The company according to Ljunggren’s own assessment spent nearly 20 years from its inception in 1986 dabbling in various cold chain products in what he describes as a bit of “trial and error, or opportunism in the sense that when there was a cold chain opportunity, you went for it.” This could have been perishable food products, flowers or pharma products, but whatever the product, the focus was squarely on volumes.
This did little to establish solid profitability and in 2005 the strategic decision was made to focus solely on the temperature sensitive healthcare sector – one that is unaffected by seasonal or economic fluctuations. It is a decision the company clearly is not regretting some seven years later as business is booming. “We’ve seen other potential in biotech, but so far the healthcare business has kept us going.” Today nearly 80 per cent of Envirotainer’s business involves carrying temperature sensitive insulin, vaccines, HIV tests and blood plasma. And because of the nature of global pharmaceutical manufacturing, in many cases the company’s containers are carrying semicompleted products from one facility to another somewhere else on globe.
Leading the market Now with the aim of “leading the market”, Envirotainer has charted a “geographical growth strategy to really set the footprint here in this region and opening an office is the easy part, now it’s making sure we are supplying the total solution to our customers in this region,” he said.
This expansion based out of Singapore will look at potential growth markets including Japan, South Korea and of course China, although as Ljunggren notes China is not only a very large market, but a challenging one as well. India will get a much greater focus for now because of its already established and growing prominence as a pharmaceutical manufacturing market and it’s also one that Envirotainer has already begun developing its business.
“But I think we have to be a bit humble because we can’t grasp everything, otherwise it becomes nothing. From my point of view it’s such a big potential this region and we’ve only just started to unleash all the potential,” Ljunggren says. But Envirotainer’s future growth track is not simply confined to geographical expansion, but also potentially other industry sectors because the company’s solution – it’s not simply the rental of climate controlled ULDs, but a comprehensive solution that the company offers – can be applied to other sectors as well. Already the company has a small niche business dealing with very sensitive electronics equipment used in semiconductor manufacturing for example. “Biotech is a growing industry and there are others, but let’s take it stepby- step… we have our challenges,” he says.
Indeed the challenges are as immense as they are varied, with much depending on the particular market. Regulations are constantly changing, global air cargo security is also evolving and infrastructure issues often pose severe constraints depending on the market. “If you’re used to handling a lot of goods, but not cold chain goods, especially when it comes to things like customs, how you handle this cargo is important because we would like to have everything unbroken in the cool chain and if its not possible then we have to make sure you have the right facilities.”
Educating people, like customs authorities and ground handlers in countries such as India, and getting them to trust in the whole process and that it works, is a crucial investment in some cases he says, because otherwise “it can be a show stopper with the types of products we are actually transporting.”
In 2011, Envirotainer worked with more than 400 companies in the pharmaceutical and healthcare industry, helping to transport the equivalent of 75,000 pallets to more than 100 countries around the world. In the Asia Pacific region, Envirotainer works closely with leading airlines – including Cathay Pacific, Emirates and Korean.
