Alkaloid Skopje: Interview of the CEO / Chairman of the Management Board of Alkaloid AD Skopje for the Serbian magazine “Magazin Biznis”
The way of 15 at 2,500 employees
In 1936, when it started operating as a basic morphine extraction plant, Alkaloid was the founder of a new branch of the industry with only fifteen employees. Continuous investment, commitment to growth and sustainability have made Alkaloid the sixth largest pharmaceutical company in South East Europe today, with over 2,000 employees at its headquarters in Skopje and over of 500 abroad. We currently sell to over 40 countries around the world, with a marketing network of 20 offices in 14 countries outside of North Macedonia. Alkaloid has been involved in the production of drugs, cosmetics, chemicals, and herbal processing for 85 years. The success of the operation is mainly the result of the quality of our human resources and our products and of the Alkaloid corporate brand itself. It also tracks the quality of our individual brands built by generations before us.
Asked about the keystones of Alkaloid’s development, its CEO and Chairman of the Management Board, Zhivko Mukaetov said: âOver the past 15 years, we have invested more than 200 million euros in new technologies, the complete digitalization of process, doubling the number of offices outside Macedonia, and a production plant in Serbia. We have also opened a research and development institute and a quality control center. This has enabled us to increase our sales over the past 15 years from 53 million euros to over 205 million euros which we expect at the end of this year. ”
As Mukaetov recalls, 11 years ago, the Skopje-based Alkaloid company opened its production plant in Serbia: âIn 2010, Serbia was the first country outside Macedonia where we established production and processing operations. wholesale. We employ 145 people in Serbia, which says a lot about the strategic importance of this market for us. Alkaloid’s production program in Serbia includes more than 160 pharmaceutical products. Our Becutan brand, which has helped raise generations across the region, is also present. The investment climate in Serbia is favorable and we cover the entire Serbian market outside our factory in Belgrade. In the long term, we also plan to use Serbia’s duty-free agreement with Euro-Asian Union consisting of Russia, Kazakhstan, Belarus, etc.
What are your most important export markets, where do you plan to expand and to what extent?
– Over 65% of our sales go to export, whereas two decades ago it was the other way around – 65% went to the domestic market. The countries of the region are our traditional export markets because our products are well known there. For our 85th anniversary, we organized an exhibition on the history of the company at the Skopje City Museum. While getting ready, we received Becutan soaps with a message from Bosnian consumers: âThey have the same quality after so long. We will continue to be your loyal customers. ‘ The fun is enormous when a brand becomes part of people’s lives. Outside the region, we also export to European Union, Russia and CIS, North America and some Middle East countries. We have also added Canada, Italy, Austria, Spain, Portugal and Saudi Arabia to our list of new markets over the past two years. We intend to stay focused on the globalization of the Alkaloid brand.
How do you see the competition in the pharmaceutical industry in the region, and what is Alkaloid’s position in the regional market?
– Alkaloid made its plan to enter the global market in the mid-1990s, with the start of the largest investment cycle in the company’s history, and built a new factory for solid dosage forms and semi-synthetic cephalosporins. After lengthy negotiations with international financial institutions, Alkaloid management obtained a convertible loan from the EBRD and the IFC of around 17.4 million euros, without any state guarantee, only by applying strict corporate governance practices. But in today’s rapidly changing era, pharmaceutical industries must invest in new technology, R&D, innovation, facilities and people. Falling behind would affect competitiveness, and the battle for the markets is not easy. We are faced with strong local and regional players and major generics. It is therefore necessary to keep up with technological trends and regulations, while investing in people and facilities.
What were the most difficult challenges when working during a pandemic?
– We have learned many important lessons from the current health crisis and accelerated the development of new skills. We have encouraged creativity and innovation and developed strategies demanded by the new era and new markets. When the pandemic began, the disrupted supply chain seemed to be the biggest challenge. Unfortunately, a year and a half later, it’s even worse. Commodity prices have skyrocketed, while delivery times have lengthened. For example, the delivery time for aluminum foil is now eight months, down from three months before the pandemic. As the demand for certain raw materials is very high, suppliers demand new and more stringent conditions on a daily basis. Freight containers cost almost six times as much. Instead of $ 3,000, we’re now paying about $ 18,000 per container shipped to the United States, while the delivery time has doubled. But that doesn’t just happen to the pharmaceutical industry. Facing the harsh reality is inevitable. This requires redefining the processes, finding alternatives for communication with consumers and a sustainable adaptation to change.
What direction will Alkaloid take in its development? What will your development priorities be?
– While investing in business development, we will also continue to invest in the community in which we live and work, making this our top priority. Alkaloid and the Trajche Mukaetov Foundation donated over 1.2 million euros last year for various causes. Around â¬ 300,000 went to the region, including Serbia. In the spirit of our motto – Health First, Alkaloid will remain committed to the positive values ââof credibility, professional integrity, humanity and human solidarity. The year of our 85th anniversary has been full of challenges and uncertainties. Our imperative is to build a business of satisfied people who invest their full potential to achieve our common success.
Changing trends due to the pandemic
There is a misconception that pharmaceutical companies earn more, especially during a health crisis. Alkaloid’s sales growth in 2020/2021 was at its five-year average, while this year’s global economic trends indicate drug sales globally declined by 4%.
– There has been a growing demand for antibiotics during the pandemic, with some categories of drugs unrelated to COVID completely halted. We had to adapt our plans to market demands, and with all the logistical challenges we had to face, it was extremely difficult to take the right position. The past two years have been very stressful for the whole system. But we have met the big challenges with success. This crisis can serve as an exceptional lesson for all of us, said Zhivko Mukaetov.