Actuality February 29, 2008

   Head of the company Nycomed Group Häkan Björklund declared about the plans to establish own production capacities in Russia,

on which the company is ready to spend more than €50 mln. Nycomed expects that sales in Russia and CIS countries will grow by 25% a year and will attain $1 bln by 2012.

Experts agree that growth rates of the Russian Pharmaceutical market are attractive for the western players; however, not all are sure about the presence of direct dependence between production establishment and growth of sales.

   Nycomed was established in Norway in 1874, operates in 50 countries of the world, and owns 19 factories. The representative office was opened in Russia in 1993.

The main brands are Alvesco, Calcichew D3 Nycomed, TachoSil, Beriplast etc.

Nycomed turnover totaled €2,6 bln for nine months of 2007. Sales in Russia and CIS countries totaled $367 mln in 2007.

   According to Häkan Björklund, the decision about establishment of production ground in Russia was approved by

the board of directors of the company in November, 2007.

He marked that none of the specific projects exists yet, and also neither a place nor a date are set. However, Nycomed will not probably buy, but construct the factory from scratch.

"This will be the large project, in which the company is going to invest more than €50 mln", Mr. Björklund specified.

   In Nycomed are sure that the presence of own production will allow the company to strengthen the positions on the Russian market substantially.

The company representatives name the market of Russia and CIS countries the center of growth and expect that the annual growth of sales will not be lower than 20-25% within the nearest five years. By their expectations, by 2012 the volume of sales will attain $1 bln on these markets.

Now, according to the estimations of Pharmaexpert Market Research Center, the company occupies 2,36% of the Russian market.

   The head of Pfizer Company representative office in Russia Regis Lomm is sure that establishment of own production on the territory of Russia is the most rapid method of increase of sales volume and capture of the greater market share.

Moreover, almost all range of products of Nycomed suits the production on the Russian grounds. Head of sales department in the Russian Federation of Bayer Sshering Pharma Company Grigory Kokhreidze also considers that this decision is authorized: "The growth rates of the Russian market are considerably higher, than of the European ones". Moreover, Mr. Kokhreidze reminds that Nycomed has production experience in Russia: the company places orders for packaging its products on the Russian factory Sotex.

   Meantime, not all experts are sure that the presence of own production will help Nycomed to expand the business in Russia. "Such step can be considered rather as an increase of the company capitalization, as from the viewpo

int of stake

increase of commercial sales the constructed factory in Russia will not give special preferences.

If only Nycomed does not plan to concentrate on the stake increase of own sales in Additional pharmacological support or supplies in a hospital segment", supposes Sergey Davydov, the marketing director of the Russian representative office of EGIS Pharmaceuticals Plc.

Nizhpharm director general Dmitry Yefimov agrees with the colleague. "The company owns the sufficient amount of production grounds all over the world. The presence of production on the territory of the country, as a rule, does not give serious market advantages. The market position of any company depends, first of all, on the product and its promotion".