Belarusian Pharmaceutical Market: Who is Who
Pharmaceutical market is going to become one of the key sectors of Belarusian economy within the coming 5 years. “Ezhednevnik” and “Business-Review” magazine have prepared the “Top 10” list of major private players in its wholesale and retail segments.
Taken as the basis was in-house information and “Pharmexpert” MRC data. Turnover was taken into account, as well as businesses’ overall market activity.
This is the largest operator in the Belarusian pharmaceutical market, moreover, operating mainly in the wholesale market. Its representation in the retail segment is minimal. According to “Pharmexpert” estimates, its market share in the wholesale market in 2009 grew from 7 to 7.5 per cent.
However, independent experts believe that this number is understated. In their opinion, Dominantapharm’s market share can total approx. 10% and even more.
Pharmacists’ community refers to this business as the so-called “young lions” group – one of the most aggressive companies in the market, whose ultimate goal is increasing the business’ authorised capital with further successful sale to an interested customer.
Officially, Dominantapharm’s establishment dates back to 2004. Essentially, this is the continuation of one of the projects by a pharmaceutical businessman Pavlov who was known at his time (“Alpha-med” and others). After his heath, his inheritance was shared among family members and partners. One of the shares went to his widow, who, as market players suggest, owns this business. Significant influence upon company’s affairs is exerted by its director Felix Kozhemsky, whose interest in this business lies in profit distribution.
It was exactly Felix Kozhemsky who initiated the first deal in Belarusian pharmaceutical market’s history that involved attracting of a strategic investor. Emergence of the Russian company “Katren” strengthened the operator’s position in the local market. Together with this, the company is run by local management headed by Kozhemsky.
This deal is not only the first successful example of attracting an investor, but also the first public fact in this industry when a businessman was able to secure the profit. It was officially announced that the 51% share of Dominantapharm cost “Katren” $4mn, although several experts estimate this deal at $30mn.
By the way, “Katren” company, as well as Belarusian pharmaceutical business, was growing during 2009. Its profit at year-end comprised RUB 59.9bn, whereas this indicator in 2008 totalled RUB 42.7bn.
From the viewpoint of this business’ development prospects, some experts forecast Dominantapharm’s possible engagement into retail business. In any event, its parent company in Russia is active in this area. “Katren” is the owner of sixth biggest pharmacy chain, “Melody of Health”, with 175 pharmacies in 27 regions of Russia.
This is the company ranking high both among Belarusian distributors and retailers. In 2009, “Iskamed” ranked 3rd after Pharmacia and Dominantapharm in the wholesale market with a share of 6.2%; it is also among biggest retail networks.
This being true, “Iskamed” is one of the leaders by financial indicators and its influence. Its owner, Sergei Shakutin, is the stepbrother of one of major “Amkodor” shareholders, Senator Alexander Shakutin.
The company has a serious advantage before the competitors, which can, however, at any moment become a serious problem. Significant turnover of “Iskamed” is achieved through shipments to “Pharmacia” system, as well as public tenders. Should the Shakutins lose influence, or should “Pharmacia” switch to direct procurement of pharmaceuticals from their manufacturers, then “Iskamed” is unlikely to rank this high in our chart.
This business which includes wholesale and retail segments is also referred to as one of the young pharmaceutical lions, although it is over 10 years old.
Certain data suggests that the company was initially established to facilitate Russian “Protek” advance into the Belarusian market. But for unknown reason this never happened, and Interpharmax’ owner, who also possesses businesses in Lithuania and Switzerland, had to adjust.
The company’s new partner and stockholder was supposed to be a Lithuanian investor one which put forward the condition for Interpharmax: the structure of the latter was to include a developed retail network – about 40-45 drugstores. And recently the company was actively involved in activities to create it, opening its own pharmacies under the “Planeta Zdorovia” (Planet of Health) brand and buying small existing chains. As a result, by early 2010 Interpharmax had become the 3rd biggest national pharmacy operator after “Pharmacia” and “Belpharm”. Only during the preceding year the “Planeta Zdorovia” chain grew from 32 to 43 pharmacies. On top of that, this business has also quite good positions in distribution. “Pharmexpert” data suggests that its market share at 2009 year end comprised 5.2%, putting it in the 4th place.
According to our information sources, the Lithuanians had to postpone the deal closure due to the crisis. It is interesting how Interpharmax’ owner is going to handle such tough situation this time.
The originator of private pharmaceutical business in Belarus and owner of the USSR’s first commercial pharmacy Andrei Schebrov’s position in the retail segment is most high. His company with its 48 pharmacies ranks second after “Pharmacia” in early 2010. However, Belpharm did not make it into Distributors’ Top 10 in 2009.
Nonetheless, Andrei Schebrov is still referred to as one of the most influential pharmacists countrywide. Owing to his power, he made it through Ministry of Health’s revocation of Belpharm’s retail licence, after which the market saw emergence of a new company named “Belpharm-Centre”.
The businessman is renowned for his non-pharmaceutical projects. In due time, owing to close relations with Gaidukevich’s LDPR, Mr. Schebrov even had a piece of the Iraqi “oil pie” under the UN’s “Oil-for-Food” initiative.
5. “Vitpharmmarket”/“Pharmmarket”/“Pharmmarket Plus”
The group of distribution and retail companies controlled by brothers Leonid and Valery Tomchins from Vitebsk is one of sales leaders in the Belarusian pharmaceutical market.
“Pharmexpert” chart put their distribution business into 5th place with 4.4% market share and retail business into 6th with 25 regional pharmacies.
However, at least in retail business their rating should be higher. This is because another asset of theirs, “Pharmmarket Plus”, which unites Minsk pharmacies, was not taken into account.
This project emerged following memorable revocation of licences in the early 2000s from a number of Belarusian medical and pharmaceutical companies. Apart from the mentioned “Belpharm”, another big retail operator (“Nordin”) started facing problems. External pressure was exacerbated with internal debates among co-owners of this business. It is exactly when the Tomchins came along and rented about 15 small but very “lucratively” situated pharmacies in various locations in the Belarusian capital. According to the data of market players, the Tomchins are controlling these pharmacies to the present day.
Vladimir Adamovich is the most well-known and ambitious nation’s pharmacist. It is rumoured that in the course of the most recent re-registration he was very eager to get the licence #1. However, he never got it.
It is notable that his wholesale company did not make it into the latest Pharmexpert’s Top 10, although, for instance, as recently as in 2007 “Kompharm” ranked 3rd with a market share of 3.9%. In the 2009 retail business chart “Kompharm” took 4th place. By early 2010, the company owned 31 pharmacies.
Essentially, the businessman owns more pharmacies. For example, such companies and brands as “Moya Apteka” (“My Pharmacy”) and “Officina” belong to him.
The previous year was a good one for his manufacturing business, largely because of the “swine flu” wave. Adamovich owns the “Lekpharm” factory which produces, among other things, the widely advertised arpetol.
By the way, he is the only one on our chart who has assets in all three major pharmaceutical industry’s segments – manufacturing, wholesale and retailing.
This business is controlled by Ivan Kozyrev, one of the Belarusian Defence Ministry’s “natives”.
“Unipharm” company group includes “Unipharm” proper, “Interficina”, and Brest pharmacy operator “Basalm” which demonstrates good dynamics over the last several years.
Unipharm had a 3.8% share of the wholesale market at 2009 year end, Pharmexpert data suggests.
This company is also referred to as one of the “young lions”, and it confirms this status by aggressiveness and dynamics in the market. Pharmexpert’s chart puts it higher than “Unipharm” with a market share of 4.1%. For comparison, in 2008, Pharmin’s share in distribution comprised 3.1%. Over the reviewed period, the company has made the biggest upward leap among all others.
“Pharmin” is headed by Innokenty Yasnovsky, but the marker players associate it with the owner of a famous hosiery producer “Conte-spa” Valentin Baiko from Grodno.
The company is active in both wholesale and retail segments, but is beyond the Top 10 of either Pharmexpert’s charts.
However, it is reckoned as one of national pharmaceutical market’s leaders in terms of its influence. This has to do with its owner and director Anatoly Gariev, a once highly-ranked official at “Pharmacia”.
Nikolai Nebyshinets, owner of a distribution and chiefly pharmacy business (5th place, 28 pharmacies at 2009 year-end), boasts an impressive record of service – a policeman in the past and a sportsman at present (he is First Vice-President of the National Judo Federation), close friendship of the powers that be.
The last circumstance was the reason for which the businessman granted himself the right to rent sites for pharmacies at locations of the Presidential Administration.
At one time, when some PA’s boss became suddenly inspired by the idea of creating a presidential pharmacy network, businessman’s peaceful course of affairs could have been ended. But, as far as we know, PA already dropped this initiative.
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