ICN To Suspend Operation Of All Its Russian-based Plants
Anastasiya Naryshkina
12/11/98
BizEkon News
Russica-Izvestia Information, Inc.
All five Russian-based factories of ICN Pharmaceuticals Inc. will suspend operation from December 25, 1998 through January 15, 1999.
The move will affect production facilities based in St. Petersburg, Kursk, Tomsk, Yoshkar-Ola and Chelyabinsk. The time-out is needed for the company to look around, according to company's Moscow office general manager Mikhail Sapovskiy.
The move is attributable to several reasons. Firstly, due to the current crisis the company registered a slump in the demand for its products with company warehouses overstocked with medicinal preparations. Further still, the company has accrued USD 34 million in outstanding debts from its partners. Hence, the necessity to market the accumulated products to be accompanied by drawing up a revised production and marketing strategy and carry out current maintenance of the equipment.
Interestingly enough, ICN has been involved in the local output of popular Russian drugs developed quite some time ago (like pentalgin and inhalypt, to name just a few) which most of local patients can afford. Meanwhile, the demand for these drugs has since slumped both among population and distributors.
Estimates of Remedium agency involved in market monitoring suggest that Russia's 1998 pharmaceutical market is bound to shrink by an estimated 25 percent in terms of value on 1997. However, pharmaceutical manufacturers plans have been drawn up long before the current crisis. Hence, they have since found their warehouses overstocked with products yielded in line with originally approved production targets.
Meanwhile, according to Remedium marketing director Sirma Boshnakova, the country's pharmaceutical market reportedly relatively stable again following the September boom is projected to persist early next year. With pharmaceutical market being exclusively responsive to the general economic situation in the country, the marketing official in any case does not expect significant decline in drug sales volume in the months ahead. |
