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FYR Macedonia's pharmaceutical sector gets boost from EBRD and IFC
An important privately-owned pharmaceutical manufacturer in the Former Yugoslav Republic of Macedonia will be able to expand its access to international markets with a financing package from the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD).
The combined financing being provided by the two institutions consists of a loan of EUR 17.4 million (approximately US$17.7 million) to Alkaloid AD Skopje, a joint stock company manufacturing pharmaceuticals, chemicals, cosmetics, coatings, and food products. This transaction represents IFC’s sixth and the EBRD’s second private sector industrial investment in the country.
"The investment represents an excellent opportunity for IFC and the EBRD to help a forward looking, domestically-owned Macedonian company to broaden its markets and improve its international competitiveness," stated James D. Wolfensohn, President of the World Bank Group, who signed the agreements for IFC in Skopje today.
"FYR Macedonia needs strong private sector manufacturing companies to help re-integrate the country into the international economy in the wake of the Kosovo crisis," said Horst Köhler, President of the EBRD. "The timing of this investment makes it particularly important, in view of the damage to the country’s manufacturing base and the greater need for pharmaceutical products in the region. This project will help to restore trade links throughout the Balkans."
Alkaloid will use the proceeds of the financing to upgrade and modernise its pharmaceutical production facilities, in order to meet Good Manufacturing Practice (GMP) standards which are necessary to sell in international markets.
The project is expected to cost a total of EUR 35.4 million (approximately US$ 36.0 million). The
EUR 8.7 million (approximately US$ 8.9 million) loans being provided by each institution include options to convert the loans into equity of Alkaloid.
Founded in 1936 with 15 workers, Alkaloid was the first plant in the Balkan region to produce pharmaceutical products. Through subsequent mergers and acquisitions, it increased its scope of activity to include the production of a variety of finished drugs, medicinal herbs, cosmetics and fine chemicals. Alkaloid was privatised in 1995 and has become one of the most successful companies in the country and a leader in the domestic pharmaceutical sector.
Both the EBRD and IFC play active roles in their member countries throughout the Balkan region. Since the country became a member of both institutions in 1993, each has made numerous investments there.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than US$ 21.2 billion in financing for its own account and has arranged US$ 15 billion in syndications and underwriting for 1,852 companies in 129 developing countries
Visit the IFC’s website at: www.ifc.org
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