In the first half of 2021, the Grindeks Group achieved a record high turnover and profit. The turnover rose to 115.6 million euros, which is 21.1 million euros or 22% more than in the first half of last year. The Group’s profit was 19.8 million euros, which is 7 million euros or 55% more than in the first half of 2020. Juris Hmelnickis, Chairman of the Board of JSC Grindeks, shares his thoughts on how the Group has managed to achieve such impressive results.
We focus on the offer in the defined therapeutic groups
Reaching a turnover record in the first half of 2021, I would like to highlight several reasons that have contributed to this.
First, we work according to business strategy and focus on the supply of defined therapeutic groups. These are the cardiovascular, central nervous system, anticancer and diabetic medicines. Our subsidiary Kalceks specializes in medicines for the hospital segment. We develop new products in these groups, as well as make appropriate changes in marketing strategy. This allows the Group to focus on clear tasks without wasting energy and resources because it is clear to us that the whole spectrum of pharmacy is impossible and should not be covered.
Secondly, it is our global activity, in which we strengthen the recognition of the Grindeks brand. I am deeply convinced that already this year our global operations will expand even more and our number of export countries will reach 100. This is another proof that we are a global player in the pharmaceutical market and are moving towards our goal.
Thirdly, it is the rapid development of the subsidiary Kalceks, which according to strategy focuses only on supply to hospitals. Currently, Kalceks is experiencing the results of long and determined work.
Efficiency and profitability are improving
The efficiency and cost-effectiveness results of the Grindeks have improved due to changes in work organization. They reflect the success of the Grindeks Group in making a profit.
In addition, these achievements and expansion of the Group have been achieved without increasing costs and the number of employees. Currently, the Group has 1493 employees. We also evaluate which activities are more efficient and cost-effective to do ourselves and when to outsource.
The demand for Grindeks medicines is growing
During the first half of the year, the demand for the Group’s products for the treatment of cardiovascular and central nervous system diseases, as well as for medicines for hospitals increased significantly. The competition in these segments is very intense, so I am glad that partners, doctors, and patients prefer our medicines. It should be noted that the Covid-19 pandemic also led to a higher incidence of cardiovascular and central nervous system diseases. Patients are more often treated in hospitals.
The pandemic, in general, is having a major impact on the pharmaceutical industry, especially on the supply chain, from raw materials and consumables to products. I would like to indicate that we deal with various obstacles very well, because we are more flexible than other members of the industry, and we make decisions more quickly. In a competitive environment, partners choose to work with us.
It is a hard job, not luck
I would like to draw attention to the fact that the conditions of the pharmaceutical market are not particularly more favorable for the Grindeks Group than they are for other pharmaceutical companies. Yes, I have also heard the myth that the whole pharmaceutical industry is growing due to the pandemic. I cannot agree with that. Please see the performance of other pharmaceutical manufacturers! They are not all that bright.
There are companies whose turnover and profit are growing, especially vaccine-producing companies, but the demand for medicines is not growing in all therapeutic groups. There are medicines for which the demand is not rising, but even reducing. However, I may say that Grindeks knows how to use the opportunities wisely that the situation of Covid-19 brings.
At the same time, we are guided by the new business strategy and re-organize our operations accordingly. We have also changed the organizational structure to become a patient-oriented company. To achieve such results, we worked hard in the first half of this year and continue to do so. This is a result of hard work, not luck, so I would like to thank the entire team of the Grindeks Group, every employee for their work!
The global economy is becoming more unpredictable
The further development of the Covid-19 pandemic is still unclear. How will it affect people’s lives? What else will entrepreneurs have to face? Rising electricity and natural gas prices pose additional risks. As a result of these factors, the world economy is becoming even more unpredictable. Successful development will require adaptation to new situations, rapid decision-making and flexibility.
We have learned to live with Covid-19
Last year we have learned how to live with Covid-19. Employee health protection and business continuity are also being implemented this year. I am very pleased that 70% of employees have already been vaccinated against this disease or have had it. I would like that vaccination numbers to reach 85-90%, so the company organizes various initiatives to motivate employees to vaccinate and protect both themselves and their loved ones from the disease.
We will develop new representative offices
To improve operations and achieve better results, we will create new representative offices. In this way, we will be closer to our cooperation partners and have a deeper understanding of the needs of our patients.
Until recently, expansion in the countries of the European Union was only a plan, but now there is a real, intense activity. If a country is chosen as strategically important, we will not deviate from the goal until we achieve it. Product portfolio and geographical coverage – these are the conditions for further development.
There will always be challenges. In economically developed countries, where the pharmaceutical industry has a history and traditions, entry barriers will always be high, but this does not scare us at all. We just have to do it and go step by step!