Richter Gedeon: Independent And Profitable

The only independent Hungarian pharmaceutical company, Richter Gedeon,is also the country's biggest and most profitable drug firm. The Hungarian government is about to sell an additional 19% of the firm's existing shares, and there are plans for an equity issue that would amount to a roughly 5% increase in share capital. The value of RG's free flotation will be more than twice that of every other listed pharmaceutical company in Hungary, Poland, the Czech Republic and Slovakia combined, according to Credit Suisse First Boston analyst, Spencer Jakab.

RG is the largest importer of pharmaceuticals into the Commonwealth of Independent States, with some estimates giving the company 10% control of all drug imports into the region. Mr Jakab says that the 10% figure appears to be incorrect, and is based on older, presumably less comprehensive estimates of the market's size. On his calculations, RG appears to be the largest single pharmaceutical importer with 4.17% of imports and 2.8% of total sales in value terms, and 1.8% expressed in terms of volume.

He sees the CIS as the most promising market in the industrialized world, despite the fragmentation which has resulted from the collapse of centrally-funded health care and the cessation of government drug tenders. He forecasts current per capita consumption of around $11, which is 3.8% of that in North America, to rise by an average 12% annually in constant dollar terms.