Health Above All
Živko Mukaetov, CEO and President of the Alkaloid Company Management Board
“In the long run, consumers don’t communicate with anonymous products, rather they build a relationship with a brand, identifying their own values with what it stands for. For a brand to survive in the marketplace, it must always make good on its promises, and in such a way win the trust of consumers. This can only be achieved when a product guarantees consistently high quality.” Ž . Mukaetov Alkaloid is a Macedonian success story that has been growing and developing for 77 years, garnering glowing testimonies along the way, all of which speak volumes. With its 14 subsidiaries and four representative offices (involving the USA, Switzerland, Russia, Ukraine, Romania, Bulgaria, Albania, Turkey and all the countries of the former Yugolsavia, all run from its head office in Macedonia) Alkaloid is the sixth largest pharmaceutical company in Southeast Europe. It has several manufacturing plants in the capital Skopje, and one in Belgrade, Serbia. Pharmaceuticals, in addition to chemistry, cosmetics and botanicals, make up the mainstay of business activities, and over the past 15 years more than 100 million Euros has been invested in this sector, in facilities and production technology. The most successful pharmaceutical product from Alkaloid undoubtedly comes in the form of the Caffetin brand, which celebrated 55 years on the market in 2012. Caffetin offers a combination of four perfectly balanced ingredients to provide a synergistic effect in treating all kinds of pain. By any means of comparison, Caffetin can be called one of the leading Macedonian brands for export. With over 10 billion tablets sold, Caffetin has come to be identified with overcoming pain. Consumer awareness of this brand was the reason behind Alkaloid’s decision to develop variations in terms of further applications. Caffetin Cold was the first in the new line, followed by Caffetin Lady, Caffetin Cold with natural vitamin C, and the last non-tablet release intended for the treatment of symptoms of cold and flu, Caffetin Cold Max sachets, which Alkaloid spent three years developing in conjunction with a foreign partner. Alkaloid’s leading brand in the cosmetics sector is Becutan, and it has long been a household name. Confidence in this brand has passed from one generation to the next for more than 30 years. This has forged the strongest of foundations and turned it into a long-standing tradition. Having begun with only five products for the care of young skin, today’s portfolio features 20 types of basic Becutan products in nearly 40 forms, all clinically tested. As an internationally established brand, Becutan is synonymous with tradition, consistent quality, trust and customer loyalty. The production of organic herbal products in the form of teas is one of the fields of enterprise at the centre of attention, primarily due to the exclusive nature and the quality of the medicinal plants that grow wild in Macedonia, all of which are used as resources in a strictly controlled and sustainable manner. Alkaloid organic teas are certified by international institutions for the European, American and Japanese markets. Since 2005, Alkaloid has been producing tea products for renowned American companies such as Aveda, a member of the Estée Lauder Group, and two years ago it began a co-operating with Arbonne International and Swanson Healthcare Products, in the framework of which Alkaloid produces tea intended for their markets in the USA, Canada, the United Kingdom and the Pacific. Mr. Živko Mukaetov, the CEO and President of the Management Board of Alkaloid in Skopje speaks to PROFIT magazine.
1. Mr. Mukaetov, where were you born, and where did you grow up and go to school?
I was born 39 years ago in Skopje. After my primary education, I went on to study at a grammar school focused on mathematics because of my interest in that subject. I excelled as a student and was awarded prizes in various competitions. I continued my education at the Faculty of Mechanical Engineering in Skopje, and the capacity for logic that I developed during my studies set me on the right path for my future career. After graduation, I decided to add colour to my logical side by way of creative marketing management, so I went on to postgraduate studies in London, at the Chartered Institute of Marketing.
2. What was your career path like before coming to the position of CEO of Alkaloid? How long have you held this position?
When I was 11, my father was appointed General Manager of the Company. I grew up surrounded by ‘Alkaloid people’ and in my formative years, when a concept of a future career forms, I practically lived with Alkaloid.
My first professional experience came in 1992, through working as a presenter and marketing agent at Radio VOX Skopje, and this is still there in the official version of my CV. In 1998 I got my postgraduate degree, in Marketing and management from London, and I found this to be a profession that truly fulfils me. By 1999, after working briefly in REPLEK, My career at Alkaloid began as a Project Leader in the field of advertising and promotional activities.
I climbed the corporate ladder rung by rung, both systematically and gradually. I attained my first managerial position in 2003, when I was appointed Marketing and Sales Director at the Company’s Profit Centre Pharmaceuticals, and a year later I was promoted to become Director of the Centre. To learn how any business operates, you need to be part of it and move through the different tiers, starting from the most basic. I was part of the key operations related to my present activities, and I know exactly how everything functions in each sector. I’ve been running Alkaloid for eight years. My enthusiasm hasn’t waned and I can’t imagine myself belonging to any other profession.
4. What new technology do you use in terms of production to improve the quality of what you offer?
Making a high quality product is a complex process that involves adhering to the most rigorous regulatory requirements, and all the more so when it comes to drugs. To fulfil these, we’ve introduced the latest technology and equipment for production, which has the capacity necessary to monitor all the stages of development, as well as the quality of our final products. We’ve introduced new technologies when it comes to the process of granulation, compression, tablet filming and the packaging process. We’ve introduced a high-tech HVAC (heating, ventilation, air conditioning) system and our drugs are produced in so-called D-Class clean rooms, which we regularly requalify, the parameters of which are continually monitored via our Building Monitoring System (BMS). Our priority is to train staff to implement new technologies and new regulations. We’re also introducing new technology in Laboratories for quality control, equipped with the latest apparatus and instruments in compliance with the highest EU standards for the quality assurance of drugs.
All new technologies are closely linked to developments in IT. For six years Alkaloid has worked with the SAP ERP system in manufacturing, quality control, quality assurance, storage, sales and production planning, so we have the ability to monitor every batch of any drug produced, and from every angle, from the entry of raw materials to testing and approval from quality control, monitoring production, storage, batch release and sales.
Alkaloid has successfully passed the GMP inspection (Good Manufacturing Practice) performed by agencies for medicines in the United Kingdom, Romania, Slovenia and Jordan, as well as by dozens of multinational companies that we’re pleased to have as our long-standing business partners.
5 What is the CRM Sales Vision Pharma Anywhere application and who is it meant for?
Alkaloid is the first company in Macedonia, and the first pharmaceutical company operating in the region, to have independently developed and put into practice the innovative application CRM Sales Vision Pharma Anywhere, which is actually an upgraded version of the current Customer Relationship Management System, which the Company implemented for the first time in the pharmaceutical sector in 2008.
This application works on mobile tablet devices (Apple, iPad4), and provides continuous, timely and effective communication between company employees; those in the field, in offices at our base of operations and in subsidiaries outside Macedonia.
The uses for this are associated with data analysis, daily planning, marketing activities, projects, research and so on.
6. In terms of exports, where do you send your products, and which are the most popular?
Alkaloid is very much an export-oriented company, and through its 17 offices outside Macedonia, it carries more than 60% of what’s produced to foreign markets involving more than 30 countries. Our priorities include Southeast Europe, the markets of the member states of the European Union, the CIS, the USA, Russia, and the Middle and Far East.
The process of EU harmonization began more than 10 years ago, and in this regard the Company is fully prepared to adapt to the legal norms and rules in place and practised in the markets of Bulgaria, Romania, Slovenia, the Czech Republic, Poland, Slovakia and Croatia. Our team responsible for drugs registration in the EU has undergone extensive training, and with the help of our office in Ljubljana, which is our hub for the whole of the European Union, we’ve started to work on a huge project involving EU registration for our drugs. In the markets of the member states of the European Union, Alkaloid has more than 300 marketing authorizations (licenses for the release of drugs) issued by relevant institutions, of which more than half involved the strictest EU regulation procedures (The Mutual Recognition and the Decentralised Procedure).
Recently, Alkaloid obtained its first license for the release of its product Cefadroxil (Alicef) within the leading European economies, on the markets of the old European countries of Germany, France, Austria, Spain and Portugal. This amounts to the first independent drug registration in the history of the Company for these markets, and in the meantime we have, on the same principle, registered Metadon and Cefixime (Pancef) in those same countries.
After we’d taken steps to strengthen our position in Russia over a period of a few years, and after we’d completed our network in the Ukraine, we conducted a detailed analysis of the markets of Kazakhstan, Azerbaijan, Georgia and Turkmenistan. We’ve also been working actively on an established, systemic approach towards improving our already established export operations in Armenia.
In line with this positive trend, Alkaloid continues to consider constant expansion in terms of marketing and establishing facilities for production in other countries. Depending on market conditions, and having in mind a short-term business plan and the development strategy of the Company, the realization of which we’ve been actively and continuously working towards, our future steps will also come to be defined, as well as the countries of interest and forms of investment.
7. To what extent do you export to Serbia, and what do you sell most of in our country?
The Republic of Serbia is one of our greatest export markets, primarily because of its proximity, connections to us, cultural similarities, traditions and so on.Having operated initially through our four regional representative offices in Belgrade, Novi Sad, Kragujevac and Niš, we’ve moved on to achieve our current level of production in Belgrade. In the beginning, this amounted to a secondary stage in the production of 17 forms of pharmaceuticals, but we later also invested in primary production. In Serbia today we produce more than 50 kinds of pharmaceuticals, and our total portfolio of products on the Serbian market is greater than 200.
The initial investment was made at the end of 2010 and so far, over several stages, we have invested funds to the tune of nearly 2 million Euros in the field of solid and liquid pharmaceuticals, a control laboratory, our energy saving project and so on. More than 60 people are employed in this subsidiary of Alkaloid in Belgrade.
As with the general business of the Alkaloid Group, pharmaceuticals account for most of our turnover here. According to Serbian pharmacists, Alkaloid products have never left the Yellow Card Registry (of drugs), which is a testament to the reputation of the Company in this market. And that is also why Alkaloid decided to invest in the opening of its first manufacturing plant outside Macedonia, in Belgrade.
Our OTC products, cardio preparations, drugs that affect the central nervous system and our range of antibiotics are the basic pharmaceutical groups we work with. In terms of cosmetics, Becutan is certainly our best-selling brand.
8. When we talk about pharmaceutical and cosmetic products, competition in the region is fierce. How do you present your products to consumers in Serbia, as well as other countries in the region?
The pharmaceutical industry is very dynamic. We need to keep up with global directions and follow all the latest developments, no matter how difficult it might seem to achieve that in terms of being a company coming from less developed part of Europe.
The positive image Alkaloid prides itself on is the result of teamwork and a proactive marketing concept, involving a kind of battle on behalf of every product we sell, and this goes for all the markets in which we operate. Despite the fact that we sometimes face a degree of suspicion in terms of the perception that we’re a company from a developing country, the fact that over the past 15 years Alkaloid has invested over 100 million Euros in manufacturing facilities, laboratories, an Institute for Development and Quality Control, as well as technology, all goes to show that we release products of a superior quality onto the marketplace, and that they can sit next to any product in the world.
One more factor underpinning the positive image of the Company is provided by several advantages we have, such as our presence and firm base in a number of markets in the region, an increasingly powerful and modern product portfolio, professional and trained staff and labour standards that comply with the most stringent international regulations. Pharmaceutical products belong to the most strictly regulated category of products generally, and entering foreign markets is not easy by any means.
To be competitive in any market, investment is necessary, and this must be directed towards local staff, the product portfolio and marketing. The competition is formidable. We face strong local competition where we operate, as well as powerful multinational and generic competitors with vast production portfolios. Each market has its own unique character and it’s very important that each market is approached individually.
Alkaloid has about 1,500 employees. 1,150 of them work at the head office in Macedonia, and around 350 in subsidiaries.
9. What operating results have you recorded in 2013. Do they differ from what was expected, and if so by how much?
We expect that the growth in terms of consolidated sales revenue will stand at approximately 5% compared to the profit earned in the last year, which means that we’ll end 2013 with total revenue of around 115 million euros. We also expect to record an increase in profit compared to what we achieved last year. If we look at the plans we had for this year, they compare favourably with what we’ve achieved. Over the course of this year we’ve made a large number of investments, developed new products and expanded our product range, we’ve opened up new markets and employed many people. Judging by all these factors, Alkaloid will realize another successful year.
10. What, in your opinion, could be changed to make the trade in pharmaceutical products between Serbia and Macedonia more efficient and profitable?
Serbia and Macedonia are among those countries involved in the CEFTA free trade agreement. Therefore, with this contract and in accordance with the principles of free trade, all the conditions for relief, improvement and the efficient flow of trade and economic co-operation are met. I would like to point to our excellent relationship with Hemofarm, with whom we co-operate in the field of infusion solutions and an exchange of know- how, and I wouldn’t rule out a potential joint appearance on the third markets.
11. Social responsibility and environmental protection are important facets to your company's operations. What do you do to ensure that your company is socially responsible?
The years that we’ve been present and active are a credit not only to management, our employees and our partners, but to all stakeholders and the community in which we live and act. Social responsibility is part of the tradition of Alkaloid. We believe that through our social responsibility we can contribute to the improvement, advancement and development of the community in which we operate.
Alkaloid is a verified and reliable partner to health systems in those countries where its products are available. It actively participates in and helps organize events for experts and is involved in the donation of equipment and other means of improving health projects in terms of infrastructure. We participate in a range of humanitarian activities in the region.
In honour of the great strategist and visionary of Alkaloid, as well as the long-time CEO of the Company, Trajče Mukaetov, in 2007 Alkaloid formed the ‘Trajče Mukaetov’ foundation, which aims to provide scholarships and donations, and fund talented doctors and pharmacists, as well asto provide financial support for projects in the field of medicine and pharmaceuticals. So far a total of 262 students have been awarded scholarships through this foundation.
In 2011, when Alkaloid celebrated its 75th anniversary, our employees took part in a massive humanitarian campaign, whereby funds were donated to the foundation, and in just a day and a half around 7,000 euros was raised, intended to equip the Pediatric Oncology Department of the Clinical Hospital of Paediatrics in Skopje. These humanitarian gestures became a tradition, so that over the last two years employees of the Company have collected 19,300 Euros in personal donations intended to help the most vulnerable groups of patients, young children and premature babies.
The Alkaloid logo and its motto “Health Above All” can be seen on the kit of Macedonian national sports teams, and the Alkaloid chess club has been the proud holder of many awards and honours. Quite simply, we support and will continue to standbehind all the projects we believe benefit the community in which we live and work.
12. Among the many awards you've received so far, I'd single out the International‘Mother Teresa’ Award, given to you this year for expressing humanitarian support, understanding and solidarity with people in need. What do those kinds of awards mean to you?
This respected state award represents a huge honour for me, but also serves as an incentive to ensure that future activities are characterized by those values it recognizes, namely humanity, solidarity, mutual understanding and respect for diversity. These are the values I grew up with and the ones I try to pass on to my children. Helping people in need will not impoverish anyone. Quite the contrary, it will lead to richer experience for all of us., and that comes from knowing that we have done something positive. The money I received in being awarded this prize, which recognized our significant achievements on behalf of the Republic of Macedonia in the field of humanity and human solidarity, amounted to five times the average salary at home. I donated this and it went towards the purchase of materials needed for work at the Institute for Rehabilitation of Children and Youth ‘St. Kliment Ohridski’ in Skopje.
This month I will be awarded the Red Cross gold medal in recognition ofmy personal contribution to achieving the humanitarian goals of this organization.
This year, the market of the Republic of Serbia sees several new products from our portfolio, from which I would point out just a few. There’s the new non-tablet extension of our leading brand – a powder sachet intended to reduce the symptoms of cold and flu called Caffetin Cold Max; new products under the brand Proculin, Proculin lens and Proculin tears, Crill oil, Biocrill active, as well as some pharmaceuticals that are dispensed by prescription. Within our brand for children’s cosmetics Becutan, we also plan to introduce previously unseen attractive products, as well as diapers for babies. Consumers in Serbia will be able to enjoy new types of organic teas.
15. What are your plans for next year?
Business plans for 2014 are in the final stage of being drawn up. Detailed analysis of market potential is being conducted, and we expect to introduce new products, plough a furrow into new markets and continue to invest in all aspects of our business. Over the past 8 years, the company has recorded a steady growth. At this point we might say that we expect this trend to continue, and that we’ll see further growth in all categories.
16. In September 2007 you were named Consul General of the Kingdom of Denmark in Macedonia. How did that come about?
My being named Consul General of the Kingdom of Denmark to the Republic of Macedonia was subject to approval by a number of authorities in both countries. From the Kingdom of Denmark my nomination came via the Royal Danish Embassy in Vienna, the Trade Council of Denmark and the Ministry of Foreign Affairs. Ultimately, a patent for my nomination followed, issued by Her Majesty Queen Margaret II. This was followed by the approval of the receiving state, or institutions in the Republic of Macedonia. The procedure took more than half a year in all. This engagement in the field of diplomacy is a particular pleasure for me, a great honour and a responsibility, as well a fact that adds value to my executive position in Alkaloid.
17. Your business is dynamic, but tiring as well. How do you manage to overcome everyday stress?
In addition to the active positions you’ve mentioned, I also sit on several committees, hold the position of Vice President of the Economic Chamber of Macedonia, am a member of the Managing Board of “Summit 100”, form part of the Board for “Macedonia 2025“, and since March this year I’ve been the President of the Macedonian Handball Federation. My working day lasts at least 9-10 hours, and in a calendar year I’m away from home for at least 100 days because of commitments at work. I spend every spare moment I have with my loved ones. I like to relax at home with family. My wife Emily, daughters Kristina and Anja, Iva my stepdaughter and son Trajče are my inspiration and give me strength whenever I might feel the strain. .
18. What do you do in your leisure time? Where do you like to go out?
I’m a big sports fan and I try to make use of the weekends when the weather is nice for cycling or a tennis match. Although it’s a supplementary engagement, and I see it mostly as a hobby that gives me personal satisfaction, my position at the National Handball Federation ‘demands’ that I keep track of developments in the handball champion’s league, the stage on which Macedonian teams perform. I recently enjoyed the city’s derby between eternal handball rivals, Vardar and Metalurg in Skopje. In January, together with the Macedonian handball team, I’m travelling to Denmark so as to follow the European Handball Championship for Senior Men, the first big outing for the national team since I was given this position.
Going out for me is really rare and is usually related to business engagements when I’m in Skopje, but when I’m in Belgrade I enjoy ‘Madera’ and the restaurant ‘Žabar’, as well as the excellent Serbian food on offer generally.
19. If you were able to, what would you change in your career so far?
I’m really happy with how my career’s developed up to now, and I’d have nothing much to change. The only thing I’d wish for is a little more time for myself and my family.
