| ICN Pharmaceuticals split by geography The pharmaceutical business of former Yugoslav Prime Minister Milan Panic has finally split into three companies. Mr. Panich himself stated this the other day in Basel, Switzerland, introducing journalists to the board of directors of the new corporation ICN International - one of the three companies that emerged as a result of the restructuring of ICN Pharmaceuticals. According to the corporation's executive director, Adam Jurney, his division will focus primarily on conquering the markets of Western and especially Eastern Europe. It is under the jurisdiction of ICN International that, in particular, all five pharmaceutical factories purchased by Milan Panich in Russia and one of the largest pharmacy chains in our country are transferred. ICN Americas, which remains headquartered in California, will operate only in the North American market, and Ribapharm, which unites all ICN research divisions, will develop and test new drugs.
According to Milan Panic, the restructuring was launched in order to optimize the management of the company, which “has grown too quickly in recent years.” However, it is no secret that the “geographical” division of ICN Pharmaceuticals began largely due to pressure from minority shareholders. In their opinion, a company listed on the American stock market does not necessarily have to pay so much attention to Eastern Europe and especially to unstable Russia.
So far everyone is happy with the result of the restructuring. According to Andrey Kozyrev, a member of the board of directors and vice president of ICN International, for Russia this will mean at least an increase in investment and attention. These words were confirmed in a conversation with a correspondent of the Vremya Novostei newspaper by Milan Panich himself, who intends to continue to remain one of the largest Western investors investing in the development of domestic pharmaceuticals. “Over the next three years, we intend to invest about $200 million in Russia,” he says. - One of our five factories was recently reconstructed - in fact, in Kursk we created a new modern enterprise. But we intend to build another completely new production facility according to GMP standards within the next two years.” In addition, Mr. Panich promised that the ICN pharmacy network in Russia, which currently numbers more than 100 retail outlets, will expand: in five to seven years it will have more than 1,000 pharmacies. From 10 to 20 million dollars will be invested in scientific development - ICN intends to fulfill its promise and create its own research center in Russia.
But the investments will be accompanied by a rather painful transformation of most of ICN's Russian divisions. According to Andrey Kozyrev, in Russia the company intends to shift its emphasis from the production sphere to the marketing sphere: “We have excess production capacity, but factories offer to the market products that are 20-30 years old. We need to seriously change our portfolio and reassign our people. Most of the seven thousand ICN employees in Russia are workers and engineers. And we need sales representatives. Therefore, some production workers are already moving into marketing structures.” Mr. Kozyrev believes that the restructuring of ICN in Russia will be difficult both technologically, since GMP standards require a completely different organization of production, and psychologically - after all, after the renovation, the factories will probably face an excess of workers. At the same time, he emphasized that so far ICN has managed to avoid mass layoffs of employees in Russia. Oleg VOLKOV |
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