The executive manager of pharmaceuticals distributor Farmexpert says the company has increased sales by taking over some of the market shares previously held by smaller distributors that left the industry.
Iulian Trandafir believes that the concentration of the drug distribution market will bring an increase in turnover for the top 4-5 players, which jointly hold 50% of the entire market. The drug distributor logged sales of more than 200 million RON (about 56 million euros) in the first nine months of the year for Farmexpert Sud, 30% higher than in the corresponding period of 2004.
Farmexpert is a group of distinct territorial entities (Farmexpert Sud, Farmexpert Cluj, etc) grouped under the same umbrella, founded in 1996.
"The reduction of the mark-ups linked to drug distribution, which occurred in the third quarter, hit the profitability of small distributors on the market. Unable to generate the high sales volumes that in their turn would maintain profitability at a relatively constant level, many small companies had to exit the market," stated Trandafir.
The reduction of mark-ups for drug import, distribution and retail by 30% on average, imposed by authorities, damaged the profitability of all companies on the market, whose sales outpaced revenues. According to the Farmexpert official, the company will see the same growth rate in 2006. The company currently ranks fourth in the list of top distributors operating on the Romanian market, according to its own estimates.
"We will take over market shares associated with the gap created on the market by small distributors closing shop. At the same time, we will boost our sales by expanding the portfolio of products to be sold next year," Trandafir added.
The consolidation of the drug distribution market started late last year and deepened in the second half of the current year, amid the delayed payment of debts accumulated to drug and medical equipment suppliers.
"We will not bank on the expansion of the customer base to boost our sales. We are mainly present on the segment for independent pharmacies, being less focused on chains," explained the Farmexpert manager. The company also indirectly controls the Dona pharmacy chain, comprising over 30 outlets countrywide. The company owns a network of 6 warehouses in Bucharest, Ploiesti, Brasov, Cluj, Iasi and Timisoara, as well as 8 offices in Romania. The company''s customers include about 3,500 hospitals and pharmacies, while its product portfolio, including almost 1,500 brands of pharmaceuticals, cosmetics and para- pharmaceuticals, is 70% comprised of imports.
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