ECONOMY

Drug firm Hemofarm secures EBRD loan

BELGRADE (Reuters) – The development bank for Eastern Europe and the ex-Soviet Union approved yesterday a 22-million-euro ($26.01 million) loan to Serbia’s biggest drug maker, Hemofarm, to build a plant in Russia. Hemofarm will use the loan to buy new equipment and build a pharmaceutical packaging and production plant in Obninsk, some 100 kilometers (62 miles) southwest of Moscow, the European Bank for Reconstruction and Development (EBRD) said. Olivier Descamps, EBRD Business Group Director, said Hemofarm’s aspirations to grow beyond its own borders fit well with the Bank’s strategy to promote cross-border investment. «This is also a strong signal to the potential of this economy and its entrepreneurs. This shows that this company can be competitive and that it can invest overseas,» he said. Hemofarm said the plant, to be built in line with European Union standards, would improve its positions in Russia, which accounts for 52 percent of its exports and where it sold goods and services worth $22 million in 2003. It said the total value of the investment in the Russian plant would be 24.8 million euros, with the EBRD providing 22 million of the amount under an eight-year loan agreement with a two-year grace period. The loan is currently unavailable from local commercial banks, the EBRD said, adding it would try to syndicate 50 percent to foreign commercial banks, a move that may establish strong links between the company and foreign banks that could result in long-term financing in the future. This is EBRD’s second loan to Hemofarm since 2002, when it granted 18 million euros to help the company expand capacity and exports. Hemofarm, with headquarters in the northeastern town of Vrsac, was privatized in the 1990s and now has 3,500 employees. It has a 46 percent share of the domestic market. In 2003 it sold drugs worth 15 billion dinars ($259.1 million) and its exports were worth $57 million. It exports mainly antibiotics and heart drugs to 27 countries, with Russia its biggest export market.