Pharmaceutical firms seek markets further afield
WIDER WORLD WITH A LIMITED MARKET AT HOME, PORTUGUESE DRUGS COMPANIES ARE LOOKING FOR GROWTH THROUGH FOREIGN SALES. THE ATRAL-CIPAN GROUP EXEMPLIFIES WHAT CAN BE ACHIEVED

THE pharmaceutical industry plays an important role in Portugal’s economy, supporting the national health system and accounting for an increasing share of expenditure on health care. It is also a sector capable of attracting foreign technologies and investment to the country.

The government considers the health sector a priority. In recent years, many new hospitals have been built and others have been renovated and the process is continuing in line with EU standards. At present, Portugal has 215 hospitals, 388 health centers and 512 medical posts.

Portugal’s pharmaceutical industry employs around 10,000 people. Local companies have raised their market share—from 8 percent to 15 percent in the last 10 years—by building manufacturing plants and acquiring new equipment and technology. However, the industry remains dominated by big multinationals that concentrate mostly on importing finished products.
Not surprisingly, the more ambitious Portuguese pharmaceutical companies are increasingly turning to global markets to expand their business.

SEBASTIãO ALVES Chairman of the Atral-Cipan Group

The Atral-Cipan Group sought out foreign markets from its early years and has continued to do so. From humble beginnings as a small pharmacy in a poor neighborhood in Lisbon half a century ago, it has evolved into a supplier of products to countries around the world, with markets from the United States to Asia and the Middle East.

“We have sought out markets all over the globe,” says the group’s Chairman, Sebastião Alves. “The United States is the largest in which we operate and we are well aware of its demands and possibilities.”
Granted a license to set up a pharmaceutical laboratory, Laboratórios Atral, in 1948, the company hired technicians and purchased and developed a wide set of technologies.

In 1958, it was approved as a finished pharmaceutical formulation company by the U.S. Food and Drug Administration. Cipan started operating as a bulk antibiotic manufacturer in 1963.

The group has been involved in many technology transfer/ turnkey projects. In 1965, it established Laboratórios Atral del Peru for the production of pharmaceutical specialities. It set up the Brazilian antibiotics company Cibran in 1976 and Cesquisa in Spain in 1981.
Projects involving chemical synthesis and a sterile block were carried out in the 1980s for Acofarma in Egypt, ACAI in Iraq and Darou Pakhsh in Iran. More recently, in 1997, Cipan was involved in the establishment in Madras in India of a plant to manufacture 1,200 tons of penicillin G potassium per year.

GROWTH STRATEGY From small beginnings, Atral-Cipan has expanded to become a supplier of products to countries all over the world

The international pharmaceutical market is highly competitive and quality is a crucial ingredient for success. “The chemical-pharmaceutical industry has always been demanding,” says Mr. Alves. “Maximum quality is the trademark of our production and is an indisputable advantage.”
Regarding itself as a medium capacity operation, Cipan has never sought to compete with the big international companies.

“We prefer to position ourselves in areas which are of less interest to the major companies,” Mr. Alves says. “There are many productive areas that are of little or no interest to the bigger firms.”

The Atral-Cipan group does not seek joint ventures, but Mr. Alves says it would consider them if the circumstances are right. “The group is open to collaborations, either through co-production, or co-marketing, in both raw and finished products, provided the business is to the advantage of both parties,” he says.