Polfa Grodzisk unlikely to find investor by elections
By : Robert Wylot
While the Treasury Ministry is optimistic about a quick sell-off of Polfa Grodzisk (PG) (http://www.polfa-grodzisk.com.pl), industry analysts doubt whether the pharmaceutical producer will be able to attract an investor before September's elections.
"Investors aren't lining up to buy Polish drug manufacturers," said Andrzej Szymanski, pharmaceutical industry analyst at DM BIG-BG brokerage house. "They have free access to the market anyway."
The treasury, which announced the sell-off last week, is hoping to sell a majority stake in the Grodzisk-based company by Sept. 20, three days before the general ballot.
According to Szymanski, large multinational drug makers won't be interested in the sale. "Big firms don't need to buy the market share or the recognizable (Polish) brands, because they already have both," he said. "The Polish market isn't protected by the government, so they can freely import their own products."
Moreover, the multinationals that have bought into local pharmaceutical producers did so with great expectations, the majority of which have only partly materialized, analysts said. "The reality has proven not as great as expected," said Monika Cebula of COK BH brokerage house. Cebula said the market's 10% annual average growth rate has been smaller than investors had hoped for and as a result expectations of a lucrative expansion further east have been downgraded.
Despite this gloomy backdrop, PG is in sound financial shape and could be attractive to the right buyer. Last year the company posted zl. 5.7 million ($1.3 million) in profit on zl. 140 million ($33 million) in revenue, against zl. 5.4 million ($1.2 million) in earnings on zl. 76 million ($18.1 million) in revenue in the first half of this year. "We built a zl. 20 million ($4.8 million) state-of-the-art production plant two years ago and it's running at nearly 70% of its capacity," said Marek Januchowski, general director of PG.
Though big multinationals may not be interested in buying a stake in PG, analysts said smaller foreign firms might be. "There are many international producers that could be eyeing PG," Szymanski said.
"Even smaller pharmaceutical manufacturers may be interested, because Polfa Grodzisk is small but has a good reputation," Cebula added. She estimated the value of a majority stake in PG at zl. 120 million ($28.6 million).
