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EBRD Helps Armenia's Liqvor Go for Growth

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  • EBRD Helps Armenia's Liqvor Go for Growth

    European Bank for Reconstruction and Development
    Nov 26 2014

    EBRD Helps Armenia's Liqvor Go for Growth


    Liqvor, a privately owned pharmaceutical producer in Armenia, has
    undergone an exemplary transition from small-scale company to regional
    leader thanks to an EBRD investment of US $1.5 million and Early
    Transition Countries Fund donor support.

    Liqvor's success has many faces: quadrupled revenues, achieving the
    first ever Good Manufacturing Practice certificate in the
    TransCaucasus and growing exports to almost every post-Soviet country
    and beyond.

    A pioneering producer

    Across the region, consumers are the biggest beneficiaries of
    EBRD-Liqvor cooperation This innovative pharmaceutical producer has
    brought generic medicines to the market and made it possible to access
    drugs more easily and cheaply.

    Liqvor was initially a "garage" based business run by two local
    scientists-turned-entrepreneurs, Dr Sergey Matevossyan and Hovhannes
    Ghazaryan, who quickly found a prescription for success. They found a
    niche in the market and introduced local equivalents of branded
    medicines, while at the same time helping the pharmaceutical industry
    grow.

    Breaking old habits

    Armenia's pharmaceutical sector traditionally suffered from a lack of
    transparency, low numbers of domestic companies and a prevalence of
    smuggled drugs. Breaking the old habits of the healthcare system was
    not an easy task in 1991 just as the Soviet Union collapsed.

    Yet that year Liqvor became the first private pharmaceutical company
    in Armenia and the first in the CIS to manufacture infusion solutions
    in plastic packaging according to European standards.

    Between 2004 and 2005 the EBRD, with support from the Early Transition
    Countries Fund, agreed to provide a US $500,000 equity investment for
    the purchase of a new production line for single-dose injections in
    small glass vials, the design of a factory and "clean rooms" necessary
    to obtain an international standards certificate.

    A comprehensive growth strategy enabled Liqvor to extend its product
    range and facilitate exports with ophthalmic solutions in small
    plastic bottles.

    Soon after the EBRD's Business Advisory Services (BAS) programme made
    technical assistance funding available. Liqvor could now acquire a
    computerised financial management information system for better
    financial and tax accounting, cost accounting, inventory management,
    procurement, sales and human resources processes. A key breakthrough
    In 2010, with a mezzanine capital investment of US$1 million from the
    EBRD, Liqvor made a breakthrough and raised a further US$2.9 million
    from local banks, subsequently becoming eligible for the Armenia's
    first Good Manufacturing Practice certificate.

    Dr Matevossyan is proud of their achievements. "Cooperation with the
    EBRD as an institutional investor has greatly benefitted our company,"
    he said. "We implemented corporate management culture, we implemented
    financial discipline, and we got acquainted with new tools that were
    unknown to us."

    Since the EBRD first invested in Liqvor, sales have quadrupled - from
    US $1 million in 2005 to US $4 million in 2013. With 96 highly
    qualified employees at present, the company is planning on hiring more
    experts. Their growth in exports looks set to continue too, with the
    company considering entering new markets in Vietnam and Yemen.

    "Our aim is to be a regional leader in the production of effective
    medicines. We want to build a healthy society, and while doing so
    increase our production capacity and exports," Dr Matevossyan said.

    "We will create new jobs which will help Armenia's economy to recover,
    increase our share of Armenia's pharmaceutical industry, and grow the
    country's exports."


    Source: European Bank for Reconstruction and Development



    From: Emil Lazarian | Ararat NewsPress
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