Experts predict that the launch of Hemofarm’s own production facility in the region will increase its strong position in Russia, which currently accounts for 60% of the company’s worldwide annual exports.

“We set up a detailed and ambitious business feasibility study before we decided to go ahead with the Obninsk project,” said Branislav Vukovic, project manager at Hemofarm Inzenjering. “We based the study on our own estimation of the Russian market and our position in this market, which is going from strength to strength, as well as on upgrading our plans for Hemofarm’s development and presence in the market.”

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The initial implementation phase involves the construction of a solid forms plant, with accompanying infrastructure, on the 12,000 square metre site. This work, begun in October 2004, is due to be completed in autumn of this year. By that stage, Hemofarm expects to employ 250 people, mainly from the local area.

Milomir Miyatovic, project director of Hemofarm in Obninsk and CEO, explained: “The Russian plant will produce all the generic medications that we currently import from Serbia.” Apart from investing in the construction of the factory in Russia, enabled by a European Bank for Reconstruction and Development loan over the past two years, Hemofarm has allocated significant funds for upgrading the manufacturing facilities, as well as the expansion of automated high-bay warehouses with 13,500 pallet places.

Initially, Obninsk will serve the Commonwealth of Independent States countries. “After that, exporting to European Union countries will definitely be on the cards,” said Miodrag Babic, president of the Hemofarm Group. “We believe that it will become much easier for us to do business in Russia from 2007, when local producers will become exempt from customs and import charges. For that reason it is certainly more cost-effective for us to be producing locally for the local market.”