Pharmaceuticals retailer Helpnet is to expand its operations on the Romanian market, either through partnership with a foreign investment fund or through the merger or acquisition of rival companies on the market.
“The company”s expansion plans entail some 200 new drug stores by the end of next year, but this will not be achieved organically,” said Isabelle Iacob, Helpnet”s general manager.
Network expansion is part of the company”s positioning plans for the Romanian market ahead of EU integration.
This year”s sales, says Iacob, have been estimated at about 27 million euros (1,000 billion ROL). Helpnet”s turnover exceeded 7.5 million euros in 2003 and it ended 2004 with total sales of 15 million euros.
“The start of the year has been atypical for the industry and perfectly resembles the beginning of 2003, when financing troubles damaged the companies on the market,” she said. “The beginning of the second quarter has been an extremely difficult period for the market, given that the limited funds available for subsidised drugs pushed sales of prescription drugs downwards.
“The results so far are in line with the budget that was set at the beginning of the year, with the lower sales of prescription drugs being offset by rising sales for pharmaceutical products and cosmetics.”
Payment delays on contracts with suppliers have generated liquidity problems, particularly for independent pharmacies. The number of takeovers and acquisitions at the beginning of the year was higher than in the same period last year, say companies on the market. By the end of this year, Helpnet hopes to have increased its number of pharmacies to 90 through investment in excess of 1.2 million euros.
Helpnet was split from drug distributor Farmexim and the two companies are now distinct entities. Helpnet”s shareholder structure is made up of Romanian private investors and is only tied to Farmexim through some common shareholders.
The drug store market is highly fragmented at the moment, with the largest retail network accounting for below 5% of the total number of pharmacies. Helpnet”s competitors are Sensiblu, which is owned by A & D Pharma, and the drug store chains owned by the distributors Relad, Montero and Fildas.
The close to 30% rise of the pharmaceuticals market in the first quarter was largely derived from the retail channel as a result of the 90% subsidies, which tripled consumption of subsidised drugs.
The situation is similar to last year, when sales to the population accounted for around 70% of the overall market, while sales to hospitals accounted for 30%. alexandru.cerchez@zf.ro