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Croatian Pharmaceutical Industry Increases Investments

The pharmaceutical industry has been one of the top economy sectors in Croatia for years.

The Croatian pharmaceutical industry is one of the most important and strongest sectors in Croatia, and pharmaceutical companies and medicine wholesale trading companies are near the top of the charts of the largest Croatian enterprises when it comes to revenues. Over the past few years, the industry has launched a major investment cycle, increasing production with the steady growth of exports, despite numerous challenges in the local medicine market, from delays in payments to the non-transparent regulatory framework, reports Poslovni.hr on October 22, 2017.

According to an analysis by the Croatian Chamber of Commerce, the most significant positive effect on export growth in Croatian economy last year was achieved by the pharmaceutical industry, whose exports increased by as much as 56.4 percent, which represented almost a half of total growth of exports. According to data from the Central Bureau of Statistics, the production of pharmaceuticals in the first two months of this year almost doubled compared to the first two months of 2016.

Companies gathered in the Association of Medicine Producers of the Croatian Employers' Association have continued with a positive trend of increasing employment and further investments in new production facilities, research and development. Thanks to operating within the global Teva group, Croatia's largest pharmaceutical company, Pliva, last year had revenues in the amount of 4.6 billion kuna, which was 16 percent more than the year before, with profits of 554.7 million kuna. Pliva was the sixth largest company in Croatia by revenues.

Last year was marked by massive investments and positive trends in Pliva, both in employment and in the increase in production and exports. “Pliva has invested more than a billion kunas in research and development over the past few years, in addition to millions which were invested in production, environmental protection and new technologies. The Pliva Research Centre is one of the leading research and development centres for Teva Group. Investments like these enable exports to new markets, encourage new employment and also give the opportunity to all suppliers to prove themselves in international markets,” said Mihael Furjan, the CEO of Pliva.

Jadranski Galenski Laboratorij (JGL) has continued to follow its vision towards becoming a global pharmaceutical company specialising in the development and production of sterile value-added products in ophthalmology and otorhinolaryngology, and in using of seawater for medicinal purposes. Last year, its revenues grew by nearly 6 percent (661 million kuna), almost quadrupling the profits to 91 million kuna. JGL celebrated its 25th anniversary this year, launched 44 new products, signed 12 new partnership contracts and opened seven overseas markets, in Italy, Spain, Poland, Thailand, Vietnam, Singapore and Malaysia.

In 2017, JGL continues to strengthen its strategic segments, while export orientation remains a keystone and a prerequisite for the realisation of long-term growth and development plans, with the markets of Russia and Croatia accounting for 71 percent of sales. “The pharmaceutical business always brings new challenges and new opportunities for those who are brave and enterprising. Behind us are two difficult years characterised by the economic and geopolitical crisis in our key export markets of Russia and Ukraine. We have chosen to compete in an open market, which means fighting every day for survival against international competition,” said Ivo Usmiani, the CEO of JGL.

JGL is followed by Belupo, with revenues of 653 million kuna, almost nine percent more than in the previous year. It has just completed a four-year investment cycle in the amount of 530 million kuna. Its factory is one of the most significant greenfield investments in Croatia and will enable the company to open hundreds of new jobs, in addition to its existing 1,386 employees. New production facilities will allow a 150 percent growth in production. “Belupo has a long history of greenfield investments. The pharmaceutical industry requires constant investments in technology and manufacturing capabilities. Belupo has always focused on new technologies, increasing competitiveness, developing new products, and opening up new markets. Strategic investment planning and following the global scientific and technological innovations have defined our group,” said Hrvoje Kolarić, the CEO of Belupo.

A significant 10 percent growth was also achieved last year by Roche Croatia, a producer of innovative medicines for oncology patients. With 518 million kuna of revenues generated in Croatia, they made 14 million kuna in profits.

Although wholesale medicine traders are struggling with the challenge of long delays in payments for medicines, which have brought them deeply in debt, they have managed to improve business results last year. The largest wholesaler, Medika, had 2.5 billion kuna of revenue and 50 million kuna in profit, up 12 percent. Medika is followed by Phoenix, which also had a nearly nine percent growth in income last year, Medical Intertrade and Oktal Pharma.