Sicomed needs miracle cure for profit

Although sales are in no way smaller than last year, Sicomed Bucharest, Romania’s largest drugmaker just doesn’t seem to be making much profit these days. With 2001 deemed as a very slow year for the company, profit is still recording drops, even in nominal terms.
In the first nine months of 2002, Sicomed netted profit worth 2.95 million dollars (98.24 billion ROL), down from the 3.5 million dollars (99.41 billion ROL) posted in the year-ago period.
Following the dispute with the Ministry of Health and after halting the production of injectable drugs, Sicomed posted $4m in profit last year, down 50% since 2000. However, 2002 saw the company’s profitability dropping even lower, due to large investments and because Sicomed used loans to finance its operations. These factors were joined by the sluggish money collection from the health system.
The company’s nine-month sales reached 27.5 million dollars, with the same amount logged in 2002.
“The turnover evolution in the first three quarters of 2002 and the launch of new products enable us to maintain the full-year turnover forecast of about 40 million dollars. Practically, this evolution, together with the market stabilisation in terms of competition concur to create a development strategy for Sicomed, with higher goals for the years to come,” said Klaas Postema, Sicomed general manager.
Postema was appointed at the helm of Sicomed this summer, replacing the Greek Vassilis Alexacos – whom the shareholders blamed for the dispute with the Ministry of Health.
The new manager intends to reorganise the product portfolio (focusing on higher value and more profitable products) and to complete the company’s restructuring. As a consequence, the company’s non-core operations will be outsourced and some 30% of the employees will be gradually laid off. Moreover, Sicomed is planning to enter a joint-venture with Austrian company Fresenius, for the production of intravenous drugs.