Farmexim seeks cautious expansion

Pharmaceuticals distributor Farmexim Bucharest has posted 20% higher total sales for the first six months of the year compared with the same period in 2004. Turnover last year reached 60 million dollars (50 million euros).

Despite sales having risen since 2004, the company encountered a series of difficulties on the market. “We experienced the peak of the crisis in the system this year. Its impact is being felt throughout the entire market, with the first consequence being a drop of the retail market by 25% in April. We are a retail-oriented company and implicitly our business was also affected,” said Ovidiu Buluc, Farmexim”s chief executive and majority shareholder.

Farmexim is hoping to increase its market share for pharmaceutical distribution to 12% in 2006, up from the expected 8% for this year. Sales should be close to 82 million euros (3,000bn ROL) for 2005, the company”s chief executive says.

“We launched a revamped team of medical reps in June who will have the task of promoting pharmaceuticals in hospitals. We expect to gain a foothold on this market this year, particularly as sales of hospital products currently represent less than 10% of our turnover when this segment accounts for 30% of the market worldwide,” he explained. Farmexim”s investment budget for this year is somewhere in the region of 2 million euros, and will be used to open three regional logistics centres and to expand its vehicle fleet to 200.

Besides expansion, the company also plans to allocate 250,000 euros to staff training.

Buluc ruled out an aggressive expansion policy. “The growth pace of Farmexim”s business would not benefit from taking over other distribution companies – expansion would not be sustainable because there are no clients on the market that work exclusively with certain distributors.”

alexandru.cerchez@zf.ro