Unifarm plans BGN 2 million profits for 2008

Unifarm plans BGN 2 million profits for 2008
By: Maryan Yordanov
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11.06.2008 13:15 ( UFM )

Dr. Ognyan Palaveev was born in 1949 in Sofia. He graduated from university in Germany. For 36 years he has been working in the field of economy and trade. In 2007 he defended a doctorate thesis and was bestowed the scientific degree of Doctor in Pharmacy. He has been Executive Director of Unipharm AD for 11 years. He is chairman of the Association of Bulgarian Pharmaceutical Manufacturers (ABPM), member of the Board of Directors of Sopharma AD and of the Board of Directors of Rostbalkanpharm – Russia, Chairman of the Koprivshtitsa Community Board, member of the Board of the Japanese –Bulgarian Hasumi International Research Foundation - Bulgaria. Fluent in German and Russian. He is married and has two children.

Ognyan Palaveev
Photo: Personal archive

Mr. Palaveev, why did the profit for the first quarter of 2007 exceed BGN 1.4 million, and later on shrank to about BGN 500 thousand, does your business have a seasonal nature?

The reason is the payments during the relevant periods related to increased expenses on the performance of contracts with suppliers and contracts for construction mounting works, the hike in the prices of fuels and energy supply at the end of the year, as well as the slump of the US dollar. Furthermore, till 2007’s end the Ministry of Health did not examine any applications for change in the prices.

Are the prices currently on the rise?

Despite the officially announced inflation of 12% till now the Ministry of Health has not taken a stand on the applications for changing the prices.

When is it possible to adjust your sales prices?

The government, respectively the Ministry of Health, must have the function of a registrar with respect to the prices of medicinal products on the free market, not a restrictive function. The government must regulate solely the prices of the reimbursable products as provided in the recommendations of 2002 of the European Commission and G10.

Unfortunately, the new Drug Act made the government function even more restrictive by tying the prices of generic products with the prices of their original reference products in a ratio of 80% to 20%. We are hoping this month to meet the understanding we need from the new Minister of Health.

Main problem in the relations between the Ministry of Health and the industry is the refusal to accept prices of medicinal products, updated for the annual inflation as it is provided in the Drug Act.

What is the share of exports of total sales?

Exports to total sales amount to a share of around 18 %.

How many decares of land does Unipharm own and where?

Unipharm JSC owns approximately 22 decares.

What are the profits and sales which you plan for 2008?

The planned profit for 2008 is within BGN 2 million, and we prognosticate about 18 million income from sales.

What part of the sales in 2007 were realized during the first, second, third and fourth quarter, respectively?

The sales during the previous year by quarters are as follows – BGN 4,205 million for the first quarter, BGN 5 million for the second, BGN 4,039 million for the third and BGN 3,074 million for the fourth quarter.

What part of the profit was realized during the first, second, third and fourth quarter of 2007 respectively?

We began 2007 with a profit of BGN 1,488 million, while the result during the next quarters was influenced by the increased total expenses, the drop in the US currency and the non-updated prices of the medicinal products.

How much would you like the prices of medicinal products to rise?

Our prices, as well as all the rest in a market economy are regulated by the market. We want nothing more.

Does the regulation of prices by the government concern just your products or also the other pharmaceutical companies?

The price regulation concerns all pharmaceutical companies, but it may affect differently the prices of the different medicinal products since it is based on the so-called reference principle or comparison with the prices of the same products in eight different European countries. Furthermore, the regulation takes place on two levels – prescription products, designated for the free market, and products, which the National Health Insurance Fund (NHF) and Ministry of Health pay from the budget. The non-prescription products are free of price regulation and are subject only to a registration regime

Do you plan holding an auction where to offer a precise number of Unipharm shares?

Not at this stage. If the shareholders decide otherwise, we shall inform the investment community.

Did you participate in the mass privatization public tenders 4 years ago when shares of Unipharm were offered against non-financial means of payment?

No.

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