Sep 18, 2023

Alkaloid CEO, Zhivko Mukaetov - Panelist at the Third Skopje Economic and Financе Forum - SEFF 2023

"Alkaloid has been operating in the EU for 16 years, but the fact that it comes from a non-EU country presents its own set of challenges."

Zhivko Mukaetov, Alkaloid’s Chief Executive Officer and President of the Management Board, took part in SEFF 2023, an event held under the "Europe - YES, Europe - NOW" motto and organized by the Macedonian Ministry of Finance. During the forum's second panel, themed "Markets, Institutions and Economic Development," Mukaetov touched upon the challenges that Alkaloid has encountered over the years, particularly during his 17-year tenure as its leader:

"Throughout its long history, the company underwent many transitions, various system changes, and faced numerous challenges, however it consistently demonstrated resilience and rapid adaptation to changes. A significant milestone in this process was the construction of new production facilities for solid dosage forms and semi-synthetic cephalosporins, made possible with convertible loans from EBRD and IFC. This development paved the way for Alkaloid to access European and global markets."

Drawing upon Alkaloid as a real-world example, Mukaetov underscored the importance of European market values. He emphasized that for a company to be successful in the EU, it must strictly uphold the principles of good governance, maintain a high and consistent product and service quality, and remain competitive. He pointed out that the experience of being on the threshold of the European Union has been far from pleasant:

"On one hand, we have huge manufacturing capacities, state-of-the-art research and development facilities, cutting edge technology, skilled and qualified workforce. On the other hand, our disadvantage lays in the fact that we do not come from an EU member state. However, we did not stand idly by. In 2007, our facilities received accreditation from the MHRA (Medicines and Healthcare Regulatory Agency, UK) for meeting the EU Good Manufacturing Practice guidelines. Our first registered product in the European Union was the drug Lisinopril (marketed as Skopryl). Presently, we have over 950 pharmaceutical products registered in the EU. Out of the projected 260 million euros in sales for this year, 72% come from exports (roughly 160 million euros), with approximately 55 million euros from sales in the EU countries."

By making comparisons between a company’s success and the economies of nations within and outside the EU, Mukaetov highlighted the competitive edge enjoyed by European manufacturers:

"We can use the following example to draw a comparison based on Alkaloid's practical experience in the EU market: a few years ago, we planned to acquire a company in Poland. During the due diligence process we gathered insightful data regarding our initial position in contrast to theirs. To begin, our market consists of 2 million residents, while theirs encompasses roughly 40 million. In the case of Polish pharmaceutical companies, the registration process for EU – wide product placement typically takes under a year, while for us, the entire procedure lasts about three years. The checklists for pharmaceutical companies from non-EU countries are significantly more comprehensive and extensive than those with headquarters in the EU. Here, we receive approximately 10% subsidies for investments (for which we are very grateful, especially since support is provided to Macedonian companies that are export-oriented and invest in manufacturing facilities and R&D), while Polish pharmaceutical manufacturers receive 50% of their participation in investments as grants from the EU. If we compare this to a race, at the very start, the Polish company would have run more than half of the race, while the Macedonian company would still be at the starting line."

"If your company originates from a non-EU member country, regardless of your high-quality standards, it's challenging to stay competitive. We invest extra finances, valuable time, energy, and resources in navigating various administrative procedures. However, in our country and the region, there are many success stories that deserve to be given а chance."

Mukaetov emphasized that the EU market has a high level of transparency with strictly defined business procedures and rules. However, in order to succeed in this market, it is imperative to adhere to the principles of good governance and consistently uphold a high standard of product and service quality."

"I take a special pride in the fact that, despite coming from a country that has faced numerous challenges, we have managed to globalize our name. Nevertheless, I believe that if we were part of this large European family, given the quality of our products, the caliber of our workforce, their knowledge and experience, I am confident that the sky would be the limit – for us and for many other companies in the region."

SEFF is an initiative of the Macedonian Ministry of Finance, aimed at facilitating debates on public policies related to relevant regional topics. Тhe event held in Skopje successfully brought together distinguished figures from the economic, business, and finance spheres, as well as government officials from both our country and the region, as well as diplomats, representatives from the business sector, and academia.