Global giants operating right next to to us in Brisbane
Queensland's pharmaceutical sector has been one of the state's export stars in the past 12 months as demand for high quality medicines from Asia's rising middle class drives new records in drug exports, according to the latest annual data from the Department of Foreign Affairs and Trade.
While headline figures associated with the state's export data show Queensland generated record sales of $87.3 billion in the 2018/19 financial year, it is the performance of the pharmaceutical exports sector which has been a standout, doubling from $88 million in 2017 to $187 million last year.
The $87 billion figure owes a lot to an elevated metallurgical coal price and gas export industry tied to an appreciating oil price.
Queenslanders may be surprised to know that global biopharmaceutical company Sanofi operates a world-class manufacturing facility in the northern Brisbane suburb of Virginia.
Medicines for diabetes and cardiovascular disease as well as vaccines are manufactured here in Queensland.
Across town in Carole Park, another global pharmaceutical giant, Mylan, manufactures a suite of popular generic drugs currently reshaping retail chemist offerings throughout Asia.
Queensland goods, from a reputational standpoint, are well received by the state's Asian trading partners, as high quality, reliable and world-class standards attract a considerable premium from the region's increasingly consumption-based economies.
Interestingly, the concept of regulation or overregulation for a better description, is often cited as an impediment to businesses generally.
However, in terms of health products, stringent and high manufacturing standards remains a key selling point in the production, distribution and indeed exports of
Queensland's title of being a "smart state" and a leader in human capital is perhaps best illustrated by the outperformance of an industry that nationally will top $3 billion in export sales this year, according to Australian Bureau of Statistics data.
Much of the export dollars generated in the pharmaceutical space is led largely by CSL (Commonwealth Serum Laboratories).
CSL, with a market capitalisation of $110 billion and a stock that listed at $2.30 in 1994 with little fanfare, was originally a small Federal Government owned medical organisation that has appreciated 10,000 per cent to $250 per share in 25 years.
Stockbrokers and industry advocates spend an inordinate amount of time chasing the next CSL hoping to capitalise on the next ASX blue chip that will deliver strong capital returns, generate much of its income offshore and typically have high barriers to entry while maintaining defensive characteristics.
This evolution of manufacturing is an area of potential for Queensland's pharmaceutical industry as generic drugs observe the challenge of having to maintain strong distribution networks while contending with low profit margins.
Increasingly, the treatment of cancers and illnesses is focused on bespoke manufacturing of drugs that complement a patient's needs.
That opportunity is being realised as the embrace of high-end manufacturing coupled with a world class medical industry provide fertile ground for the next major health blue chip to arise out of Queensland.
Dan Petrie is head of media at Chamber of Commerce and Industry Queensland