Established in 1991 and listed on the Bucharest Stock Exchange since 1996, Farmaceutica Remedia is a major player in the healthcare sector, where it specializes in distribution, integrated sales, marketing and promotion. The company employs 600 people and operates a network of around 100 pharmacies, offering a wide portfolio of medicines but also food supplements, dermo-cosmetics and patient services. President of the Board Valentin-Norbert Tarus, who is the main shareholder, explains where the industry is heading and his vision for the company in this new scenario.
As the main person behind the impressive growth of Farmaceutica Remedia, how did you manage to establish and build such a presence in the Romanian market?
The most important thing of all in business development is to have a vision, a dream. Our ancestors came to Romania from Germany to build a life for themselves; they were given land and they managed to build a stable life for themselves, working in agriculture and forestry. But in 1944, with the regime change and the loss of territory, they lost everything in a dramatic turn of events that affected my own family as well. In December 1989 there was another regime change, where I participated in the demonstrations where I was consequently shot by one of the soldiers and ended up with a bullet in my hand and one in my lung. Even though I am listed as a hero of the revolution, I have never made a claim against the army or took any of the privileges offered to people on that list. In my eyes, the soldier who shot at me was probably more confused with the events at that time than I was. This is to me a part of history that we simply have to accept as it happened. In the beginning of 1990, I was sent to a hospital in Vienna for further treatments, which is where I decided to establish my own business, Tarus & Partner Keg., specializing in the distribution, import, export, consulting and marketing of pharmaceutical products. One day a colleague approached me from the pharmaceutical industry that needed help with a presentation for a conference. At that time, Romania’s per capita GDP was the lowest in Europe, the country had no foreign debts with a large population of 22 million, so there was a good opportunity for growth. I spoke at this conference, and many pharmaceutical companies came to me and enquired if I could not help them setting up their business in Romania. I ended up working with numerous Austrian and also German companies, supporting them in establishing a presence in Romania.
How did you manage to be so successful in such a short space of time?
One of the keys to our success was creating an intermediary position in Vienna to develop the business and “translate” messages of Romanian commercial behavior to western standards. When we were told, “this can’t be done,” we rendered it as “they will try.” Ultimately you need to really know the market, know the people, and work hard. Within a few years, we were able to present solid business numbers and turnover for our partner companies, which surpassed those of large companies that had offices in Romania. We were one of the first companies to start working in distribution, and one of the more successful ones. I am a chemical engineer with a postgraduate in foreign trade, and not a pharmacist. Remedia as a wholesaler began rather late with the expansion and opening of pharmacies, which proved to not always an easy sector to work with.
Yet you built a network of around 100 pharmacies and branched out into many related activities, reaching consolidated sales of RON 463 million (€97.5 million) in 2018, up 32% year-on-year.
Our activities in Romania crystallized into an integrated business – import, sales, distribution, a hospital division, logistics services, marketing, wholesale and more, though not necessarily production, which is something separate. Although we came to the sector late, we successfully grew into a consolidated business. My vision for this company is panoramic: if you’re going to do business with medicines, you can’t just stick to pharmaceuticals. We are more integrated than that; we have relationships with the producers, with the wholesalers, with the doctors.
In 1989, after the revolution, there was a lot of potential for growth in Romania. But what is it like now that you are part of the EU? Are pharmacies now quite abundant in the country?
There is still a possibility for growth: business always goes on, everywhere. A lot of people here are coming up with new ideas and perspectives to develop the business, and we ourselves are always striving to promote and launch innovative pharmaceutical products to meet the changing demands of our clients and patients. Big groups are polarizing the pharmaceutical industry and small chains will have increasing difficulties competing with the big players. Even Remedia needs to continue fighting for its position in the market.
How do you plan to deal with that situation? Would a strategic investor make sense in your company?
This competition creates a need for vision. We need to develop sales, and digitization and IT development would also be a good direction in which to invest. We need quicker response times and more integrated systems. We already have a strong warehouse management system, an in-house pharmacy application, and many other tools still, but we need to bring all these units together in an intelligent center. Our approach is to double our turnover with less employees, which is very much in line with the ongoing digitization of the market.
In Romania there is now growing demand for essential oils and organic products. Are you also working on the cosmetic side of pharmaceuticals?
Many young people with good jobs are demanding this kind of product. We are also a marketing company, and we have helped many big companies, including cosmetics companies, to do business in Romania. We are now promoting the products of a German company that makes products for people with allergies.
In 1998 you began publishing the Romanian edition of the British Medical Journal, followed by Medica Academica and MAEDICA – a Journal of Clinical Medicine. How are these medical publications supporting your business?
The best information is information from the people who are doing the research and working on projects, who know what the trends are. I think that digitization and automation will play a big role in the future. Europe is still lagging behind Asia on this issue, but they will have no choice but to adapt.
Where do you see the business going in five years’ time?
We see the need to specialize further. We are still a whole-range distributor, and although nobody has every single product, we carry more than many. We may need to change that, and make arrangements with companies that require special services. We will continue to help the development of other companies, and in terms of services we will move towards digitization. At that point of course it will no longer be my business, so another challenge will be to find the right people to lead this new process with growing sales.
What company attributes would you like to point out to investors?
We have a very long and stable history of development, we have excellent relations with our business partners from Germany and other countries, and we have a lot of knowledge about what is going on in Romania. Through my extensive travels I have found that if you don’t have a lot of contacts you will certainly fail. Germany has a very solid reputation in Romania, and any investor is welcome here and certain to succeed with the right approach.