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Here is the updated information on LPG facilities in Cordoba, Spain. I have checked up measuring units to find out, that all amounts were indicated in euros and the area of the facilities – in thousands of square metres.
LPG Facilities in Cordoba (Andalusia, Spain)
Labaratorie Perez Gemenez (LPG) is the oldest and most respected Spanish company founded in the south of Spain. The company had been successful in the national market till early 2000s, when it was decided to build new facilities in Cordoba.
The plant was constructed and launched in 2010. It is GMP certified. The company product portfolio consisted of 85 formulations to include Europe’s top 10 generics. It was financed by loans from Spanish and Portuguese banks.
In 2011, due to some economic reasons, the heirs of the company founder stopped to service their debts and initiated financial restructuring of the plant and the company.
At the end of 2012, bankruptcy supervisors finished the audit and, together with the city council, announced their decision to sell the assets of the company and the facilities.
On sale, there were:
- all production facilities;
- company brand;
- product portfolio;
At the end of 2013, the company “PHARMULA” was proposed by “friends” to take part in the tender for these assets and prepared all the required documents including business proposal and plan, trade union contract etc. At the same time, a new local subsidiary Pharmula LPG was registered to bid in the tender. The subsidiary won the competition with 4 other applicants, but since it was co-invested by Sberbank (the biggest in Russia and one of the European top 10), which was subject to international sanctions, the tender was cancelled at the execution phase.
The assets has NOT been sold until now. The last attempt to buy them was of a small company (which also took part in the first tender!), but they failed to satisfy the trade union and their proposal was also declined by the judge.
About the Plant
LPG plant’s production area totals over 50 thousand square metres. The plant is equipped with modern manufacturing and research facilities of European making. It was put in operation and actually started production of drugs. As of the shutdown, 90 employees of the initial 160 worked there. During two last years, the plant was managed by insolvency administrator, its production output totaling €5-7 million. The GMP license of the plant expired in 2015, and since it has NOT been sold to investors, the administration decided to stop production! Nobody has been dealing with sales and marketing issues since then either, which is why, presently, the plant is nothing but a modern and high-quality industrial site available at a “reasonable” price, which I assess within €19-20 million including the cost of restructuring of debts owed to the Government of the Autonomous Region and local budget. Successful bidders were supposed to pay €12 million at once.
Advantages of the Purchase
1. Modern production site in the centre of Europe.
2. Renowned regional brand, which can be restored and used to sell in the market of Spain and Hispanic countries.
3. Legal possibility to partially rebuild the portfolio of best-selling drugs owned by the company. The portfolio will certainly need to be amended with Cadila products.
4. Products can be supplied to Hispanic and North African markets. We have considered this option and our business ties in these markets are sufficient.
5. The plant has unused manufacturing facilities and engineering utilities, which can be used to mount additional production lines for best-selling finished products, especially, of Cadilla’s portfolio.
6. Our business plan implied total sales of at least €100 million in 3 or 4 year.
7. The team of PHARMULA LPG, that won the tender (!), consisted of former managers experienced in the local (Spanish) and international markets working for such international companies as Takeda, Novartis, Nikomed and Berlin Chemie. They have sufficient expertise and knowledge of the European and South-American (Hispanic) market as well. According to the business plan, the plant’s staff should be 160-180 employees, their exact number changing as required. New specialists are available from local universities of Seville and Cordoba.
The plant and the company are a very interesting investment option in respect of price to quality considerations as well as the location! This is unconditionally good and modern production site in Spain and Southern Europe. GMP license can be easily renewed. Product registration procedures and portfolio have been studied well. Obtaining new license for a new company would take 7-8 months, while the existing company will be operating.
Attention! While dealing with local administrators it should be kept in mind, that the “failed” purchase of the company by the Russian-Spanish group is a sensitive topic to discuss, because we had a very good and real proposal, while locals were putting their hopes in the future cooperation, but the reality overwhelmed our plans! However, with the support of such a respected group as Cadila, this asset will work as a well-tuned modern machine!
A Chinese company proposed to “move” the facilities, but locals rejected the idea flatly treating the Chinese as “unwanted ones”. It is very important for them, that the plant works helping to solve social issues in the town.
“Vitaly, I am sending you a brief introduction to our site in Voskressensk, Moscow Region, to consider the joint development and production of API and finished products. Yury”
1. Advantages of Location
The site is situated in the town of Voskressensk 80 kilometres from Moscow within the largest consumer market of Moscow and Volga Regions (30 million people), which is rather convenient for sales and logistics. Voskressensk (over 100 thousands of population) is one of the most “chemical” cities of Russia. There are several major chemical facilities producing mineral fertilisers, phosphates etc. All of them have their own infrastructure for recycling of toxic wastes. Trained chemists graduated from the Moscow State University and Mendeleyev Institute of Chemical Technology are widely available in the city. All matters regarding the construction site have been settled with environmental and engineering utility services. Facilities and the area of the site may be increased if required. The site is located in the industrial area adjacent to the central railway and motor road, which is good for logistics.
2. Advantages of the Site
- The legal status of the production site of the plant (facilities) is unique. The facilities have been accepted for operation by the State Commission. In other words, its construction is finished and manufacturing can be started as soon as the equipment is installed! It means, that we will NOT have to agree any additional works (such as mounting of the equipment, laying of internal communications within buildings, construction of new production blocks etc.) with authorities and receive additional permits – we will just enhance production. Otherwise, it takes about 1,5 year to obtain such a permit in Russia, not to mention the need to agree future construction with local inhabitants and state supervisory authorities.
- The constructed facilities have all basic licenses for production of API from chemical, biological and herbal materials and finished products including solid forms, capsules etc. It makes possible to quickly upgrade the plant and start production, while licensing and launching of a most advanced new facilities would take at least 1 year of time and big costs! In this case, we save 2,5 to 3 years compared to other proposals and will enter the market very soon! We will also receive additional licenses required to enhance production very fast.
- While choosing and installing equipment provided for by our existing master plan we can adjust all production lines for Cadila drugs.
- Production space is now free, which allows some flexibility in design of production lines for medium-weight volumes in laboratory building and big-weight volumes – in production building.
- There are large storage facilities for raw materials and products. Their structures are strong enough for the storage area to be increased on the same foundations and with the same networks by addition of new stories of 1,600 square metres each. That enables to upscale the finished products facilities fast and cheap.
- There is a possibility to construct a new shop for large-weight API manufacturing additional permits from the state! All engineering utilities and land are in place and may be enhanced.
Important! The owners are prepared to consider contribution of the site to a joint venture. This approach would strengthen mutual interests of PHARMULA and Cadila and is indicative of their readiness for long-term cooperation in the following areas of business:
- API production and sales in Russia, Eurasian Economic Community, Eastern Europe and other markets;
- finished pharmaceutical products production and sales in any market;
- registration of formulations and preparations with state authorities of Russia and other countries to promote them to the market as fast as possible;
- cooperation in all these areas in other markets to include Europe, Africa etc.;
- construction of new facilities in other countries (since our group is experienced in building plants for big pharma companies and is aware of all international pharmaceutical facilities construction standards).
3. Minor Disadvantages of the Site
1) The plant was intended for manufacturing of small-volume biological and chemical substances as well as finished pharmaceutical products. The plant has a big laboratory building which is not actually suitable for a classic pharmaceutical production, where buildings are positioned horizontally. However, with our resources it can be turned to advantage. The existing horizontal production space requires only minor changes to create new production, which technologists and constructors will deal with.
2) Adaptation of the site for specified production goals, especially, for API production, will require additional investment. But the cost of it will be far less than that of any other solution, where everything has to be started from scratch, especially, as regards the “legal and construction title” of the site.