"Antibiotice" has the cure for the crisis: exports

DORU MOCANU, IAŞI (Tradus de Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 5 februarie 2010

"Antibiotice" Iaşi was designated the most dynamic exporter as part of the ANEIR Awards (The National Association of Romanian Exporters and Importers) - 2009. The overall ranking evaluated the performances of 820 companies whose exports exceeded 5 million Euros.

Over the course of 2009, exports were the lynchpin of the strategy of "Antibiotice", since the crisis of the Romanian healthcare system, the foreign markets would allow for better profit margins.

Ioan Nani, the manager of "Antibiotice" SA Iaşi, said: "Our company"s turnover on the foreign markets has been growing steadily. Exports for 2009 stood at USD 13,200.000. Compared to 2006, when our exports were worth USD 6,500,000, the value of exports nearly doubled last year, and compared to 2008, it increased by 27%". When denominated in lei, last year the exports of "Antibiotice" Iaşi amounted to 40,724,373 lei, up 56% over 2008, (26,159,806 lei). The superior growth rate of exports when denominated in lei, compared to the one expressed in USD, is due to the depreciation of the domestic currency, which had a positive effect on exports.

The latter is also due to the increase in exports of Nystatin (up 36% over 2008), as well as due to the export of finished products (a 12% increase over 2008). Active substances accounted for 60% of exports, and finished products accounted for the remaining 40%.

Nystatin active ingredient accounted for 60% of the total volume of exports, injectable products - 24% and capsules - 12%.

In 2009, the company"s exports of Nystatin - active ingredient reached a record both in terms of volume and of value.

Antibiotice produces 30% of the world"s production of Nystatin

"Antibiotice" Iaşi is currently the world"s second largest producer of Nystatin, with a 30% share of the world market.

The company"s exports are targeted at the following regions: Europe - approximately 35% (Germany, Holland, Belgium, Switzerland), followed by Asia - 32% (Syria, Vietnam, Jordan, India), North America (USA) - 13% and Russia - CIS - 8.50%.

Aside fron the aforementioned areas, the company also exports Nystatin - active ingredient to South America (Brazil, Argentina, Columbia), Africa (Egypt, Kenya), Australia and Central America (Mexico and Guatemala). Finished products are exported to Europe (France, Spain) - 54% of the total amounts, Northern Africa (Algeria, Tunisia) - 27%, Asia (Vietnam) - 10% and to former members of the CIS - 9% (Azerbaijan, Georgia, Armenia, Republic of Moldova). The finished products are delivered both under the company"s own name, as well as based on manufacturing contracts with other European partners.

Injectable Ampicillin, authorized in the US

"In 2009, the main accomplishment concerning products which require prescription was obtaining the certification from the FDA (Food and Drug Administration - the US regulatory authority - ed. note) for injectable Ampicillin. The certification by the FDA lays opens the path for beginning exports to the USA, a prestigious market which will allow us to get favorable prices and improve our profit margins. In Q1 2010, we will export the first lots of the four batches which were approved by the FDA, worth over USD 1.5 million", Ioan Nani said.

Last year, exports accounted for 18.50% of the company"s turnover, and the company wants to increase exports to account for 25% of the total turnover in the next three years, in order to lower the company"s reliance on the domestic market.

In order to achieve this goal, "Antibiotice" SA plans to increase the exports of finished products to regulated markets such as the United States and Europe. The export strategy also includes registering the brands of the "Antibiotice" finished products, as well as developing manufacturing partnerships. Another objective of the company is increasing the volume of exports to emerging markets, which, even though are faced with issues pertaining to the economic crisis, have an estimated growth rate of 10-15% over the next five years.

"Antibiotice" looking to expand to the Russian market

The company has initiated the first distribution projects on the Russian market, one of the main regions that the company is focused on. The efforts of the company will focus on improving its position on the world market for Nystatin - active ingredient. "Taking into account that this is a product which has reached maturity, our strategy looks at preserving the current market share and targeting regulated markets (USA and Europe), which provide better opportunities for regulating the product", the manager of "Antiobiotice" SA Iaşi explained.

"Antibiotice" is not concerned about the exchange rate

While many Romanian exporters are revising their plans, due to the recent evolution of the exchange rate, the manager of the pharmaceutical company claims that this element will not require a change of the company"s strategy. "Our products and cost structure are good enough to allow us to handle such evolutions on the currency markets. The current situation does not affect our strategy. Of course, in terms of profits denominated in lei, we may see some effects, meaning our margins could drop below our current 40-50% margin, but what matters most is to have a large enough volume of exports, both in terms of products, and of value", Ioan Nani said.

"Antibiotice" Iaşi is the largest Romanian maker of antibiotics and exporter of drugs to over 35 countries in the world. The company"s portfolio of human use drugs includes 123 products, which cover 66 active substances (dci), 10 types of therapeutic classes (antibiotics, digestive system, cardiovascular, blood, nervous system, musculoskeletal system, sensory organs, respiratory system, genitourinary system, dermatologic compounds and hospital solutions). This portfolio is built on five basic types of pharmaceutical products (powders for injectable solutions, capsules, pills, topical compounds and suppositories).

According to its revenue and expense budget, in 2009 "Antibiotice" had planned for 245.5 million lei in revenues, of which 241.5 million lei in operating revenues and 4 million lei in financial revenues. Total expenses were estimated at 230 million lei, of which 214 million lei in operating expenses and 16 million lei in financial expenses. As such, the company expects to earn a gross profit of 15.5 million lei, with a net profit of 13.02 million lei after taxes.

Following the sale by AVAS (the Authority for State Assets Recovery) of its stake in Antibiotice in the fist half of 2009, the Ministry of Health became the main shareholder of the company, owning 53.0173% of the shares. On January 19th 2010, the remaining shares were owned by SIF Oltenia (10.0954%) and by other shareholders (36.8873%).

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