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Teva makes commitment to Russian manufacturing facility

Published on 20/09/11 at 09:26am

Teva has joined a number of its peers in the pharmaceutical sector and announced plans to build a new manufacturing facility in Russia. The investment agreement was signed late last week in the presence of Russian Prime Minister Vladimir Putin.

The new facility will be located at Yaroslavl, a city located around 250km northeast of Moscow that is becoming a hub for pharmaceutical enterprises in Russia. It will be completed in various phases, with the first phase - a facility to make oral dosage form products - scheduled for completion in 2014.

The company has not commented on its investment publicly, but local press reports suggest it could be worth more than $100 million.

Having local medicines manufacturing capacity is increasingly important in Russia as the country has implemented measures to reduce its reliance on imported drugs from a current level of over 80%, centring on giving preference to domestically-made drugs in the national reimbursement system.

Teva has been present in the Russian market since 1995 and already sells around 300 products there, although it has not yet established full-cycle production capacity in the country. But the company has made Russia a key part of its growth strategy thanks to the market's fast pace of growth and has previously said it intends to build sales there to more than $1 billion, roughly three times its expected turnover in the country this year.

Teva's Russian division has been one of the fastest growing in recent years, thanks in part to the acquisitions of Ratiopharm last year and Barr Labs in 2008, with the latter deal including Eastern European generics player Pliva.

After the Barr deal Teva was ranked fourth in the Russian pharmaceutical market behind Sanofi, Berlin-Chemie/Menarini and Nycomed, according to Farmexpert data, and Ratiopharm is thought to have pushed it into third place.

"This investment will boost Teva's ability to provide accessible quality healthcare to the Russian people and neighbouring markets," said Teva's president and chief executive Shlomo Yanai at the signing ceremony.

"It will further allow Teva to enhance its regional presence and sustain its fast growth in Russia for years ahead ".

Teva said its investment will create 200 skilled jobs and support around 1,000 jobs more in the related supply chain and services fields.

Phil Taylor

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