Icelandic giant Actavis, which purchased the Romanian pharmaceuticals manufacturer Sindan Bucuresti for 147.5 million euros last year, is registering a profit margin on the Romanian market comparable to the other markets on which it operates, with domestic sales accounting for 14% of the company's business in Central and Eastern Europe.
Although Romanian plants generate high profit margins (of over 20%) Robert Wessman, president and CEO of the Actavis group, says Sindan's profit is similar to the average profit derived by the group's other companies.
"The profit we are registering at Sindan is comparable to other production facilities within the Actavis group. However, exports are important for us, rather than securing high profit margins," Robert Wessman told ZF in an interview.
In the first six months of the year, the company reported revenues worth 56 million euros and an operating profit margin of 21%, while the company's exports reached around 6 million euros.
Actavis is currently Romania's largest exporter, with foreign sales estimated at 15 million euros this year. By 2009, exports could account for half the company's turnover, i.e. 100 million euros.
"One of the reasons we decided to buy Sindan was to become the world leader on the oncologic drugs segment. The key strategy was to turn Sindan into a global company," states Wessman.
Before the purchase of Sindan, the Icelanders had small-scale plans for their business in Romania; their annual sales stood at one million euros, whilst the drugs were manufactured at the group's Bulgarian plant.
"I had no qualms about entering the Romanian market. In fact, I was pleasantly surprised to see how our business has evolved. Actavis had a strategy for Romania even before we bought Sindan," adds Wessman.
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