GSK selects Singapore as Asia hub

GlaxoSmithKline, the UK-listed drugmaker, has designated Singapore as its Asia headquarters and will shift some of its US and UK staff to the city-state, in an effort to tap growing demand in the region.

The move comes as GSK handles the fallout from having been found guilty by a Chinese court in September of bribing doctors in China to prescribe its medicines.

This month it emerged that GSK had dismissed more than 100 staff in China following its internal investigation into the corruption scandal for which it was fined £300m last year.

The move by GSK also highlights how large pharmaceutical groups are increasingly using Singapore as a hub for expansion in Asia, home to a fast-growing middle class able to afford branded rather than cheaper generic drugs

Last month Takeda Pharmaceuticals, the Japanese pharma group, relocated its emerging markets business from Japan to Singapore, where the company will integrate the unit with an existing R&D and vaccines centre.

GSK has had a presence in Singapore since 1972 and employs 700 in the island nation.

But the rapid growth of sales in the five biggest economies of the Association of Southeast Asian Nations (Asean) - including Indonesia and Thailand - have prompted the company to concentrate more business units in Singapore.

Jason Humphries, managing director of Good Pharma Consulting in Singapore, said: "There is phenomenal growth at the moment in these big markets in the region - such as Vietnam and the Philippines - and that is attracting the global pharma groups just as they are attracting consumer goods companies."

Shi Lichen, senior pharma analyst at Alliance PKU Management Consultants in Shanghai, said GSK's move in Singapore appeared unrelated to its troubles in China. "The market recovery in Southeast Asia is picking up and catching up with China," he said.

GSK said that almost 150 top executives with global or regional roles had been moving to Singapore in the past 12 months. That was part of a shift to Singapore of US and UK-based staff that support the pharmaceutical business in countries east of Turkey.

The company said it expected to add a further 100 employees in Singapore as it completed a new regional headquarters building in the city-state, where Swiss rival Novartis also has a large presence.

The new Asia headquarters would "contain the full corporate capabilities to allow faster and more effective decision making within the region", GSK said.

Andrew Whitty, the company's chief executive, said: "In our experience and my own personal experience, Singapore excels in fostering talent, supporting business growth and offers an excellent base to access Asia."

GSK said consumer healthcare, pharmaceuticals and vaccines were forecast to grow "significantly faster" in the countries covered by its new Asia headquarters than in the rest of the world.

However, Mr Humphries cautioned it was unclear whether foreign multinationals would be able to compete in all drug segments with emerging local companies in markets such as Indonesia, where Kalbe Farma - a domestic player - has grabbed significant market share.

Additional reporting by Patti Waldmeir in Shanghai

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