STADA establishes joint venture in Brazil
09/30/2002 . Press Release
STADA Arzneimittel AG has founded a joint venture for the distribution of generics in Brazil. AVA STADA PHARMA LATIN AMERICA LTDA, which is based in Manaus and has already received its official local license as a pharmaceuticals manufacturer (PNIFF) is expected to begin marketing generic products in Brazil soon once the first product approvals have been granted. STADA owns 51% of the shares. The partner in the joint venture, with 49% of the shares, is the privately owned Brazilian company AVA Industrial S/A. "The Brazilian generics market is still young, and offers a high rate of growth. Together with our local partner we want to participate in the market growth of the coming years", CEO Hartmut Retzlaff explained STADA's reasons for entering the South American market.
Brazilian pharmaceutical market sales are expected to reach more than 6 billion USD in 2002, making it the largest pharmaceuticals market in South America. The first generics were not introduced in Brazil until 2000, but have since been winning market share rapidly. Optimistic forecasts indicate that the Brazilian generics market could reach a sales volume of well above 1 billion USD by 2005. A particular feature of this market is that international patent protection has only been recognized in Brazil since 1996. This means active ingredients already are available for generic products whose patents will still remain valid for a number of years in North America and Europe.
With its entry into the Brazilian generics market and the AVA STADA joint venture, STADA is rigorously pursuing its strategy of building a local distribution presence in attractive key markets from a very early stage, i.e. during the initial development phase of a national generics market segment.
In addition to distributing generics, AVA STADA is planning to build a production facility in Manaus, the capital of the federal state of Amazonas. This facility, which will be geared to Brazilian requirements, will manufacture AVA STADA's product portfolio in line with the needs of the local market. The total capital investment currently planned for the joint venture amounts to approx. EUR 10 million. AVA STADA has been given binding assurances by the Brazilian authorities that the whole project will be largely tax-exempt.
For more information, please contact:
STADA Arzneimittel AG
D-61118 Bad Vilbel
Tel.: +49 6101 603-113
Fax: +49 6101 603-506