Farmexpert revenue rose more than fivefold in the 2006-2013, to over half a billion euros last year. Thus, Farmexpert ranks second by revenue, after Mediplus. The company’s net income topped 90 million lei (EUR20 million) in 2013.
“Profit was not generated only by the wholesale business, we also developed related services for producers. This substantially boosted profit. (…) We are coping with high costs in terms of wholesaling, our core business, but there are also high costs in terms of warehouse utilities,” Trandafir told ZF.
Farmexpert, a Romanian wholesaler founded in 1996, is entirely held by Germany’s Alliance Healthcare Deutschland, which in its turn is owned by UK-based Alliance Boots. The German company came to hold 100% in Farmexpert last year, after buying 20% from its founder, businessman Eugen Banciu.
Iulian Trandafir says 2013 was a good year for the company, as it posted growth by 10%, in line with expectations. For 2014, the company expects growth of above 10% and may hit the EUR1 billion mark in four or five years.
“We are focusing on the domestic market, we are not interested in (parallel) exports at all. Exports only account for around 1-1.5% in revenue at the moment. This parallel export greatly distorted the market. Revenue is one thing and wholesaling and performance on the Romanian market is another. Performance on the Romanian market must be gauged by setting exports, which topped EUR500 million, apart. ”
Trandafir has repeatedly spoken about parallel exports (purchase of imported pharmaceuticals from Romania where they are cheaper and resale thereof in countries where their price is higher) and the negative impact they have on the domestic market.
Asked whether Farmexpert is interested in developing a pharmacy chain, Trandafir said it was not and added that most chains are in the red at this moment.
“We still believe independent pharmacies have a sound future ahead. Chains are also expanding, but not as fast as they have in the past. It is clear saturation is being reached. Romania has 7,000-8,000 pharmacies. A chain cannot reach 4,000 pharmacies”.
So-called independent small chains of 20 to 40 pharmacies are starting to take shape in Romania, he added. They are very well represented domestically and are faring better than pharmacies in national chains. From his point of view, the market will become balanced.
(English version by Catalina Apostoiu)