Biofarm, one of Romania's medium-sized drug makers, this year has plans for two projects outside the country, after in 2008 froze its expansion in Ukraine, where it had created a joint venture with a distributor.
"We plan to open two offices this year and as a strategy we've focused on countries of the former Russian space. The problem is the financial crisis has pushed inflation to a very high level here," said Dan Vasile, Biofarm CEO, in an interview with ZF.
He specified one of these states is Moldova. At this moment, Biofarm exports around 4-5% of turnover, a weight to be kept at this level in the following period as well. Vasile explains that profit margins generated from export activities are smaller compared with domestic ones. At the level of the entire industry, producers have extremely small exported volumes, with Romania being a market that is 70% dominated by imports.
For this year, the company has budgeted investments worth 18.6m RON (4.7m euros), with half of this sum being aimed at the expansion of the logistic base and company relocation. The rest will target development, sales force expansion and promotion.
The idea of relocating the company is older, with the 14,000-sqm plot of land the plant is now located on being under litigation.
The plant is likely to be moved to a location behind Policolor, an area where Zentiva's and LaborMed's production facilities are also located.
Around 40% of the money needed for relocation may be raised from structural funds for which the producer has already applied.
For this year, Biofarm has budgeted turnover worth 72.77m RON (18.2m euros) and net income standing at 14.16m RON (3.5m euros), after in 2008 the company had losses of 21.31m RON (5.8m euros) amid turnover worth 65.10m RON (17.67m euros).
Losses were partly caused by some investments on the Stock Exchange, particularly in stock of financial investment companies, whose value plummeted last year. Amid the deep losses, the drug maker had to register total provisions worth 35.1m RON (8.8m euros) in late 2008 for the stock portfolio depreciation.
At present, Biofarm says it has "enough cash to carry out its operating and investment activities".
The company's plans for this year also include achieving a higher market share.
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