Tending to new markets

WSE-listed distributor of pharmaceuticals Polska Grupa Farmaceutyczna (PGF) is expanding into new markets. On July 23, it registered an independent subsidiary in Lithuania that will take a majority stake in pharmaceutical wholesaler Limedika, which has an 18-percent share of the local market. The subsidiary will also acquire a majority stake Gintarine Vaistine, a company which manages a chain of pharmacies in the country.

The total value of both purchases came to E22.5 (zł.86) million. PGF also has the right to buy the remaining shares after three to five years, and the price will be dependent on the results of its activity. As for its motivation for moving north, PGF cites Lithuania's strong macroeconomic fundamentals, its stable legal framework, its rapidly growing pharmaceutical market and average economic growth of 7.6 percent annually since 2001 as reasons for entering the market. PGF also considers Lithuania its first step towards conquering other CEE markets.

"Expanding abroad is a natural development process, and we have been preparing for this move for over a year," says Jacek Szwajcowski, president of PGF's management board.

The CEE region is not PGF's sole area of interest, however. The company is opening a chain of pharmacies for the Polish community in the UK, called Dbam o zdrowie. To this purpose, it has already opened a subsidiary, DOZ UK Limited.

"There is great potential in this, since we expect Polish immigrants to find more attractive jobs and to become more affluent as the time goes by," explains Szwajcowski. Still, the English-speaking clients will be welcome too. "Our staff is bi-lingual," Szwajcowski notes. "Besides, our outlets will meet the most demanding world standards."