Eurofarma expands capacity with Laborátorios Gautier
The deal, reported by Corporatefinancingweek, adds Montivideo-headquartered Gautier’s facilities in Uruguay, Paraguay and Bolivia to Eurofarma’s expanding production chain which, it claims, covers 95 per cent of markets in the region.
The capacity expansion fits with a growth strategy of producing low cost generic products in large population centres that saw revenues increase some 22 per cent last year.
Eurofarma’s expansion across Latin America began in 2009 when it completed the acquisition of a controlling 95 per cent stake in Argentinean drugmaker Quesada Farmaceutica.
More recently the Brazilian firm told Business Monitor International that it intended to make further purchases with director of new business, Maria del Pilar Munoz, confirming that it was in talks with companies in Uruguay, Paraguay and Colombia.
Generic competition
Eurofarma’s regional ambitions are also a reflection of the increasingly competitive nature of the generics market in its home territory.
According to a recent RNCOS survey non-branded pharmaceutical sales in Brazil are already worth $1bn a year, equivalent to 10 per cent of the country’s total pharmaceutical market, and are expanding some 38 per cent a year.
However, despite this high level of demand competition is fierce with Eurofarma battling it out with EMS Sigma Pharma and Ache Pharmaceutical Laboratories for dominance of the country’s market.
And, while domestic competition may be reason enough for Eurofarma to seek to grow its business outside the country, the arrival of increasing numbers of foreign suppliers in the attractive Brazilian market may yet emerge as a bigger motivation.
In August last year, the government said that it will provide more incentives to encourage foreign drug companies to set up operations or partnerships in the country.
This has already seen India’s Ranbaxy and Dr Reddy’s have ramped up their efforts in Brazil. More recently the acquisition of Medley by Sanofi-Aventis also suggests the balance of power in the county’s market is changing.
