All the Best

“Drugs of Hemofarm as a domestic manufacturers have identical content, effect and quality as the drugs of importing, originator companies. The only difference is the price – ours are affordable, much more acceptable for the living standard of citizens of Serbia, but in other countries as well.” R.Seeliger

Hemofarm is the leading generic pharmaceutical company in Serbia and the region and people have traditionally put their trust in the quality of its products for 53 years.It was founded on June 1, 1960, in Vršac, and since August 2006 it has been a member of STADA Group. By building its reputation among clients, users and suppliers, Hemofarm aims to contribute to solidifying the reputation of the Group as a whole, but also to position itself among the world’s top generics.

The main activity of Hemofarm is the production of high quality, efficient, safe and affordable pharmaceutical products by applying the latest technologies. Hemofarm is present in 30 countries on three continents.

The technological superiority of the Vršac, Dubovac, Podgorica, Šabac and Banja Luka factories is evident from the application of the latest technologies and high pharmaceutical standards, a comprehensive and modern portfolio, quality management and certification as assurance of quality, top research and development with around 2,500 motivated and professional employees oriented towards achieving top results.

Hemofarm’s mission is to assure safety and trust through its high quality standards, affordability and care for preserving and improving health, while dealing with colleagues, clients, suppliers, partners on the market, as well as the users of its products, with care and respect.

Mr. Ronald Seeliger, Managing Director and President of the Board of Directors of Hemofarm , speaks for Profit Magazine.

1. Since 2006, Hemofarm has been doing business under the umbrella of the German STADA Group, the world’s eighth largest manufacturer of generic drugs. What are some of the other markets where this company does business, and how important is the Serbian market for STADA Group?

- STADA is a corporation which has a business tradition of over one century. Established in Germany, STADA develop business in 34 countries across the world. How important the Serbian market is for STADA Group is best illustrated by the initial investment of half a billion euros in the Hemofarm Company. Since the acquisition till today, STADA has constantly been investing considerable financial resources and it additionally invested 200 million euros in the modernization of the factory plants, capacity advancement, research and development, as well as increase of production volumes of medicaments intended for the EU market. Serbia is a very important market with potential and here we strive to upgrade our business operations and reinforce our leading position despite the challenging business environment.

2. You have been on the position of Managing Director since July 2012. What were your expectations regarding Hemofarm’s business operations before you came to Serbia and what results did you achieve during the past year?

I am glad to be here because Serbia is a country full of challenges and possibilities for the development of business operations. Results which we achieved are within the expected and planned keeping in mind the very unstable business environment. Of course, we always strive to be even better. With 20 percent of net market share, a leading position in the market of Serbia and over 60 percent in total sales volumes realized on exporting markets, I cannot be unhappy. Hemofarm is the biggest Serbian exporter, results of which are recognized through the SIEPA Award among other things. Also, production department has moved the boundaries of doing business with very impressive results.

For the first time in the history of Hemofarm, over 3 billion tablets were produced, which represents 40 percent more than the year before, but also a record-setting 80 million of ampoules, which is 30 percent more than in the previous year. We produced 1,600 different products, which is 500 more than in 2011. The conclusion is clear – we have had a good business plan and we successfully handled all the changes and challenges in the market. What is also very important is the implementation of the direct distributive model for the placement of our products directly into pharmacies which gave very positive results in one year and we will continue to develop and upgrade it in the upcoming period.

Hemofarm is a company with long tradition, but at the same time it is a new company as well, modern company which is run by young and promising managers, company which takes great care about corporate social responsibility and transparent business. On top of all that, it takes care of people – employees, business partners, local community and environment, which is what our new corporate campaign, which we launched in the beginning of April, is all about.

3. What are the basic problems which pharmaceutical companies are facing, when it comes to trade and placement of products in the market?

Hemofarm is a domestic manufacturer in the full sense of that word, unlike companies, which have the so-called “final” production, i.e. they do only secondary medicine packaging. It is a challenge to be in the industrial sector and to be a domestic producer. A vast majority of our products, about 90 percent, require a very complex process of production starting from procurement of the active substance, measurement, granulation,film coating and primary and secondary packaging to the very complex production process of getting solid forms of medicines and in the end quality assurance in our internal laboratories. Production of sterile forms is, in the technological sense, even more demanding as it additionally involves adhering to the strict standards for this type of production.

Complete technological production involves raw material procurement,which must be in accordance with the specification, checking of each individual packaging at the reception, and all the processes are validated, strictly controlled and subject to constant reviewing in order to make the final product of good quality, safe and efficient. In order to get the product of domestic origin, i.e. goods with more than 50 percent of added value which have certificate of being produced in Serbia, a very complex chain of activities, from negotiations with suppliers, transport of raw material, customs procedure, maintaining and upgrading facilities, quality and constant training of people...

In order to get the product which has the status of goods of domestic origin, there are many obstacles and challenges, starting from the VAT for import of raw materials which is 20 percent while for import of finished goods it is only 8 percent.

Apart from that, importers from EU and CEFTA countries are completely liberated from paying taxes on import of finished medicines, while the paying of customs for import of raw materials is from 1% to 5%, and Hemofarm pays an average of 3.5%.

When it comes to the process of approving batches in customs, administrative processes are long and often not efficient enough. Constant checking by inspection authorities should be added to that.

4. What should the country do or change, in your opinion, in order for the situation in the pharmaceutical market of Serbia to improve?

Given the conditions of doing business for medicine importers and domestic producers, I think the VAT rate should be adjusted, and administrative procedures for export of medicines should be simplified.

State should support domestic producers and in this way stimulate the entire business sector, reduce unemployment rate and enable supply of the market with affordable medicines of equal quality, efficiency and safety like the imported medicines.

With reference to the announcements of centralized procurement for stationary healthy institutions in 2014, I want to point out that it is safest, and probably most economical, for the state to make domestic producers the bearers of this.

Hemofarm’s plants in Vršac, Šabac and Dubovac are factories which have been doing business for a number of years in Serbia, adjusting to the conditions in the market even at the time of biggest crisis.

Procurement of medicines from domestic producers also secures utilization of capacities of the company, employees, but also our partners, suppliers …

5. What is the basic strategy of Hemofarm’s development in the Serbian market in the upcoming period?

- One of the strategic goals is constant improving of portfolio, continuous supply of the market with affordable and quality products of the latest generation which are available for all, launch of new OTC products and newly-registered prescription drugs in the market. Maintained and full developed system of quality in Hemofarm, adjusted with the strictest international standards of the technologically very advanced and sophisticated pharmaceutical industry, contributes to the high level of quality processes of production and products and represents a continuous guarantee that products from Hemofarm’s factories are quality, efficient and safe. On the other hand, as a company which bases its operations on the four key corporate values – quality, availability, care and trust, we put a lot of emphasis on development of employees, because quality, good and motivated people are one of the most important strategic pillars for successful business.

We will continue our activities in the area of prevention, we will promote healthy habits and healthy life styles, and in accordance with our mission, we will supply the market with good quality medicines of the latest generation which will be accessible to each patient. Hemofarm puts the quality of life of each individual first and all 365 days of the year we wish all the best to all.

6. Have you planned any investments in 2013 and will you employ new people?

Since the acquisition in 2006, STADA has invested considerable million amounts in Hemofarm each year.

The new strategic infrastructure investments will mostly depend from the speed of changes of the market environment. As a modern company that is keeping up with the global business standards, we are always looking for good people and quality personnel, and as I have underlined, good and high quality people are one of the fundamental pillars of further growth and development.

7. Social corporate responsibility of Hemofarm is a very important part of the company’s development strategy. Just two weeks ago, on April 1^st this year, you got the National Award of the Serbian Chamber of Commerce for corporate social responsibility.What is your company doing in Serbia when it comes to helping the community?

The award of the Serbian Chamber of Commerce is our 4th award which Hemofarm got for CSR in the last 6 years. It represents a confirmation of our existence and work that focuses on sustainable and corporate social responsibility because Hemofarm is a company which does not measure success solely by profits, but also with the contribution to the community we are doing business in.

Hemofarm Foundation recently marked 20 years of existence and successful work. In the past 2 decades, it has realized over 1,300 activities in 30 cities, through which it donated about 9 million euros.

Since social corporate responsibility is a strategic part of business philosophy, Hemofarm and STADA Group support the work of Hemofarm Foundation, which allocated 700,000 euros for ambitious projects in 2013. Besides the priority, charity activities, this year will be marked by important national projects, directed at improving the health care sector, culture, education and further development of the young, as well as very important strategic partnerships, such as the partnership with the Belgrade Philharmonic and UNICEF.

8. Where do you export your products? What products are most commonly found in your export list?

Last year, Hemofarm, like I said, got the SIEPA Award as best exporter. This recognition amongst serious competitors, out of all the export-oriented companies in Serbia in all industrial branches, is perhaps the best indicator that Hemofarm is a very important link in the entire Serbian economy, which motivates us even more to grow and develop our business operations. We strive to be one step ahead in everything, and especially in “winning” new markets. We are currently present in 32 countries, in Europe, Asia and Africa. Russia is our biggest exporting market, and we mostly export antibiotics and rheumatology and gastrointestinal range of products.

9. Are the standards for pharmaceutical products in the Serbian market coordinated with the European ones? Are there some other changes, and which ones, that need to be done in Serbia in pharmaceutical industry so we would keep up with European standards?

Hemofarm is a company which provides the domestic market with high quality, efficient and safe medicines in nearly all pharmaceutical forms and doses. We make drugs in plants with high-level technology in accordance with the strictest, GMP standards of quality as a precondition for export to demanding EU markets. High level of the quality assurance system, process of production and controlling is verified in continuous supervision by EU authorities responsible for GMP status of companies when importing in EU. We sell the same drugs in Serbia too, regardless of the market ambient which is not the same as in foreign markets; our drugs are of the same, top notch quality as those in markets of countries with much stronger and more stable economies.

10. You have been chosen for the President of German-Serbian Business Association. The investment of STADA Group in Hemofarm is one of the biggest German investments in Serbian economy. What is the role of this association? What kind of action do you take to improve the cooperation of our two countries?

It is an honour, and also a big responsibility for me to have been chosen for this position, which is another big challenge for me. DSW - German-Serbian Business Association – with over 250 members is celebrating its 10th anniversary this year. It consists of German, Serbian and international companies that are interested in strengthening or establishing a relationship with German economy. Germany is one of the biggest investors in Serbia and supports the long-term development of Serbian economy. Total German investments in Serbia are about 1.5 bln euros, which is a clear sign of a strong connection of these 2 countries. DSW is a link between Serbia and Germany, Serbian and German companies and German Embassy. This Association is a foundation for strengthening the good cooperation with the aim of attracting even more German companies to invest in Serbia and to bring progress and improvement of operations to Serbian companies, including SMEs. As the President of German-Serbian Business Association, I will try to encourage German companies with the aim of contributing to strengthening and development of a prosperous economy in Serbia.

11. How do you spend your free time in Belgrade? Do you have favourite places in our city?

Belgrade is an amazing city! The culture and classical music are areas that I am very interested in. When I have free time, and I admit there is not enough of it, I take a walk, look at beautiful buildings from the start of the previous century, the landmarks and buildings of your city. I like to visit concerts at the Belgrade Philharmonic, they are really amazing and I like to attend good sports events! Although I am from Germany and practically live in two places, I feel at home in Belgrade because it reminds me of Berlin so much. People are very pleasant and kind.

12. If you were able to, would you change, and what, in your career so far?

Absolutely nothing. I have always had the privilege and pleasure to work in big companies and challenging business environments.

Managing Director of Hemofarm, Ronald Seeliger, is at the helm of a big, leading pharmaceutical company in the Serbian medicine market, and the biggest exporter from our country.

Ronald Seeliger was born in Berlin, graduated from the Technical University also in Berlin, where he got his PhD as well, and he attended the London School of Economics. He is fluent in German, English, Spanish and French. He acquired his corporate experience in many significant industrial companies in Europe, Australia and Asia on high-managerial positions:Formula 1, Pixelpark AG, Land of Ideas FC Deutschland GmbH, RUHR GmbH and Organizational Body for European Capital of Culture

Since 2011, Ronald Seeliger has been a team member of the STADA Group, one of the leading pharmaceutical companies in Germany, and since July 1^st, 2012 he has been the Managing Director and President of the Board of Directors of Hemofarm since, and as of April 1^st 2013 he is the President of the German-Serbian Business Association.