Easy pill to swallow

In the first half of this year, the consolidated net profit of Polish Pharmaceutical Group (PGF) amounted to more than zł.28 million."We have had record high revenues, which surpassed zł.2 billion," stresses Jacek Szwajkowski, the company's CEO.

Szwajkowski says that PGF is showing double-digit sales growth and has been increasing its profitability. He thinks that the latter to a great extent resulted from a three-year motivational program for managers. Between 2003 and 2005 the company's consolidated net profit grew by nearly 115 percent, while net profitability increased from 1.29 percent in H1 2005 to 1.39 percent in H1 2006.

PGF is a wholesaler of pharmaceuticals and also runs a partnership program under which nearly 1,500 pharmacies with the "dbam o zdrowie" (I take care of health) logo operate. Through the program, the privately owned pharmacies are supported by PGF. "In this way we are building the most efficient model of managing pharmacies," Szwajkowski says.

PGF has a 20-percent share of the estimated zł.10-billion pharmaceutical market in Poland. "We are convinced that in the long run the value of the pharmaceutical market in Poland will increase, as the spending on medicines per capita is much lower than in the West," comments Szwajkowski. According to the company's financial director, Jacek Dauenhauer, the market is growing at a rate of four to five percent.

Another pharmaceutical wholesaler, Farmacol, which recently released its H1 2006 results, posted a net profit of zł.25.8 million, a significant drop against H1 2005's figure of zł.33.1 million. According to the company's deputy's CEO, Aleksander Chomiakow, the slump stems from increased competition.