Laboratorio J. Neves is very attuned to the market changes. The company's acquisition by the Soquifa Medicamentos group nine
years ago transformed a family company with little investment behind it into a very successful player. The efforts to rebuild
the company's image, rearrange its workforce and introduce new products to the market have certainly paid off. "As a result,
from 1 million (US$1.3 million) in turnover in 1997, J. Neves achieved 18 million US$23.6 million in 2006, and the objectives
for 2007 are very ambitious: to reach 25 million (US$33 million)," says J.Neves' general manager, Rui Ribas. The company's
strategy of consolidating its position in markets bigger than US$13 million annually has guaranteed a performance increase
of 25% to 30% every year. In addition to that, J. Neves recently announced the acquisition of a new production unit, which,
according to its director, aims more to increase the company's production independence than enhance its turnover.
LUSOMEDICAMENTA : A RISING STAR
"J. Neves has its production line distributed in 13 different countries, and the company's volumes are usually low considering
its supplier capacities," explains Ribas. "Portugal is a very small country; sometimes the company needs 1,000 boxes, but
we have to produce 200,000, an amount for three or four years, which is obviously a big investment added by the warehousing
costs. Therefore, in terms of logistics, it is very different to manage a company in such a situation," he concludes. This
is a common problem for local companies, but at the end of the day it could be twisted into a competitive advantage. Small
markets and volumes demand flexibility, and flexibility is currently Portugal's trademark when it comes to pharmaceutical
Still an Attractive Destination for FDI
Although Portugal has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign
direct investment FDI, Pierre Fabre, a French company that has been in the country since 1985, mostly in the areas of ambulatory
care and oncology, is a clear example of how Portugal can succeed as a destination for pharmaceutical industry investment.
Following its strategy of seeking out opportunities in emerging pharmaceutical markets (such as Morocco, Poland, Turkey, Tunisia
and Mexico), as opposed to the traditional European countries (such as the United Kingdom or Germany), the company recently
announced that it would be targeting Portugal for new investment. "Portugal, competing with other countries such as Germany,
Poland and Italy, was able to take the European production of a respiratory products line, which will be done by a third party
in the country. The choice of Portugal has shown the commitment and efforts of the Portuguese operations to create and add
value to the country's industry," says Gilda Parreira, general director of Pierre Fabre Medicament Portugal.
Despite its success in attracting new production to Portugal, Parreira points out, "the pharmaceutical sector is the easiest
target to counter-balance the budget deficit, and this is no different in other European countries. There are bigger and more
attractive markets than Portugal, and the Portuguese government has to understand the impact of these measures on the country's
ability to attract investors." Noting Pierre Fabre Medicament's ability to foster international partnerships and share development
costs, Parreira seems to be very optimistic about the company's prospects in Portugal: "The company will have two very important
launches in 2008 driven by the urology market, and in 2010 a very innovative project involving fibromyalgia."