Another merger and acquisition deal has emerged on the Moldovan pharmaceutical market. This time it is Distrimed, which intends to buy 100% of the authorized capital of Esculap-Farm and Willow. Both companies are owned by businessman Oleg Syli and are notable for owning a strong pharmacy chain Apoteka.
The Competition Council said this week that it is analyzing the possibility of such a concentration and is interested in market operators’ views on how such a deal would affect the competitive environment.
All three participants in the sale are solid pharmaceutical players. Thus, Esculap-Farm is one of the largest wholesale suppliers of pharmaceutical, parapharmaceutical and cosmetic products. In 2020, its sales revenues amounted to 200.7 million lei (-10.6% compared to 2019), and its net profit amounted to about 880 thousand lei (against 65.4 thousand lei a year earlier). Oleg Syli created this structure back in 1997.
A year later, he established a subsidiary, Willow, which operates the Apoteka chain. Now it includes 15 pharmacies, of which 12 in Chisinau, two in Hincesti and one in Balti. In 2020, the turnover of this network reached 67.6 million lei (+11%). At the same time, the losses amounted to almost 3 million lei. Apoteka employs about 70 employees, most of them pharmacists.
As for Distrimed, it received an exclusive distribution of medicines from Moldovan Balkan Pharmaceuticals and Luxfarmol. These are the leading manufacturers with a large coverage on the domestic market.
Thus, «Balkan Pharmaceuticals» is the only local company that is among the top 10 operators on the pharmaceutical market with a 2% share. Taking into account that the entire pharmaceutical retail in Moldova generates 300 million euros (drugs and parapharmaceuticals), the position of the manufacturer from Singera looks convincing.
The company has been very active over the last four years. The company with a capacity of 7 mln packs per year produces the most popular generics — anti-asthmatic, anti-inflammatory, hormonal drugs, etc. While in 2017 Balkan ranked 16th in the overall ranking, having registered 104 pharmaceuticals, its portfolio now includes more than 140 drugs. That is, we are talking about a drug line exceeding 200 types of products. Over 90% of the total production volume is sold in Moldova, including through public procurement.
The company belongs to a large Romanian millionaire businessman Alin-Daniel Hauca. At the end of last year, he acquired another asset in Moldova and started developing the Balkan pharmacy chain.
Another Distrimed partner, Luxfarmol from Tvarditsa, is a relatively young company: it has been operating since 2008 and has invested $2 million. Although the company has a technical base for the production of medicines, it has developed on medical alcohol and disinfectants. The company has been producing disinfectants since 2011, and before the pandemic their production volume was about 40 tons per year. Half of them were exported to Ukraine, and the rest was purchased by the public sector (for medical institutions, for the needs of the army and police units, etc.).
Luxfarmol’s golden hour came in 2020, when the demand for disinfectants increased many times. Thus, if before the pandemic (in 2018 and 2019) the sales volume of Luxfarmol amounted to 4.7 million and 1.2 million lei, respectively, in 2020 it increased many times — up to 55 million lei.
Having obtained two such partners, and on exclusive terms, Distrimed easily increased its turnover. In 2020, the company’s sales amounted to 215.6 million lei (1.8 times growth), and its net profit amounted to 10.6 million lei (2.3 times growth). The sole founder is Romanian entrepreneur Gheorghe Apostol. He also manages the company.
Currently, nine pharmacy chains have been formed on the Moldovan market, seven of which belong to large wholesalers. Apart from Apoteka, these are Farmacia Familiei from Dita Estfarm (182 pharmacies), Hippocrates from Tetis International (140 pharmacies), Felicia (over 130 pharmacies), «Orient from Vinamex (80 pharmacies), Elody from Becor (80 pharmacies), Gedeon Richter (over 30 pharmacies), Mama from Tri V Farm (40 pharmacies) and Peon from Peon-Farm (over 65 pharmacies).
Irina MATENKO, Economicheskoe Obozrenie «Logos Press»