Russian manufacturers of dietary supplements are overcoming stagnation. They are exporting more, expanding the product lines, and seeking new sales channels. Their alertness is increased not only by the declining sales, but also by the foreign players’ activity in the domestic market.
FOREIGN MANUFACTURERS are following too closely
In the first five months of 2017, the Russian pharmacy market of dietary supplements showed a trend for active development. According to AlphaRM, January to May’s growth amounted to 16% in value. During the same period of 2016, there was a decrease of 11% compared to 2015. However, the domestic players admit that the days of carefree growth have gone. Today, in addition to the pressure from the regulatory bodies, we must take into account the competition of pharmacy chains’ house brands and their consolidation. The requirements that the lines of dietary supplements have to meet are also becoming stricter: only rapidly sellable brands are selected for sale. The manufacturers of dietary supplements hope that the draft of the federal law on the distance selling of medicinal products, including online sales, will free their hands.
Meanwhile, the market leaders are mastering international space. In 2016, the Altai company Evalar was established in Australia, France and Slovakia, presenting 12 brands. Today, the company’s export share makes up 10% of its turnover. According to the international research bureau BCC Research, the aggregate annual growth rate of natural supplements consumption in the world will reach approximately 6.6% in the next five years.
At the same time, Russian market leaders are afraid of losing their share in the home market. They recognize that Western companies are bringing better financial offers, more effective marketing programs and a global reputation to a crisis-ridden Russia. The popularity of plant-based products attracts foreign medicinal herbs manufacturers to Russia, where they are ready to launch local production. On July 10, the German company Bionorica started constructing a factory for manufacturing medicines, including plant-based ones, in the environs of Voronezh. In four years, it will produce 15 million blisters of plant products each year. The investment will reach 2.7 billion rubles for the production stage.
SLY HUAJUi
The domestic manufacturers are trying to keep up – Evalar will launch a new factory for processing raw materials in Tyumen: it will process 500 tons of raw materials per year and produce 50 tons of pharmaceutical substances. However, the timing of the launch is not announced. The need for a new manufacturing site is associated with the need to scale up the production for the further expansion of sales markets. The arrival of the Chinese delegation of potential partners in May was of interest to the participants in the bio-cluster. “The Chinese manufacturers of plant substances are not perceived as competitors, but as partners capable of developing an infrastructure for growing natural raw materials,” notes Dmitry Belousov, Executive Director of the company Altai Biopharmaceutical Cluster.
Meanwhile, companies from China show a greater interest in the cultivation of medicinal plants. This year, the Chinese commercial and industrial company Huajui is planning to plant medicinal plants in Primorye, on 67 hectares of land. The company has big plans for wild medicinal herbs and Chinese plants in the Far East of Russia. “Our pharma producers are interested in growing raw materials exclusively for their own manufacturing needs, since the domestic market is larger the external one. If raw materials are ever sold to Russian manufacturers of dietary supplements and medicines, then in minimal quantities only,” said Barry Yen, the owner of the Hong Kong company Coffee and Tea, specializing in growing tea and coffee trees abroad.
The manufacturers of dietary supplements understand that supplements are not enough for living, so they diversify their production. The above mentioned company Evalar increases the proportion of drugs in its portfolio. “As a result of five months of 2017, the share of medicinal products in the company’s turnover reached 11%, and we are planning to bring it to 15% by the end of 2018,” announces the chairman of the Board of Directors of ZAO Evalar, Natalia Prokopieva.
Russian manufacturers of dietary supplements are overcoming stagnation. They are exporting more, expanding the product lines, and seeking new sales channels. Their alertness is increased not only by the declining sales, but also by the foreign players’ activity in the domestic market.
FOREIGN MANUFACTURERS are following too closely
In the first five months of 2017, the Russian pharmacy market of dietary supplements showed a trend for active development. According to AlphaRM, January to May’s growth amounted to 16% in value. During the same period of 2016, there was a decrease of 11% compared to 2015. However, the domestic players admit that the days of carefree growth have gone. Today, in addition to the pressure from the regulatory bodies, we must take into account the competition of pharmacy chains’ house brands and their consolidation. The requirements that the lines of dietary supplements have to meet are also becoming stricter: only rapidly sellable brands are selected for sale. The manufacturers of dietary supplements hope that the draft of the federal law on the distance selling of medicinal products, including online sales, will free their hands.
Meanwhile, the market leaders are mastering international space. In 2016, the Altai company Evalar was established in Australia, France and Slovakia, presenting 12 brands. Today, the company’s export share makes up 10% of its turnover. According to the international research bureau BCC Research, the aggregate annual growth rate of natural supplements consumption in the world will reach approximately 6.6% in the next five years.
At the same time, Russian market leaders are afraid of losing their share in the home market. They recognize that Western companies are bringing better financial offers, more effective marketing programs and a global reputation to a crisis-ridden Russia. The popularity of plant-based products attracts foreign medicinal herbs manufacturers to Russia, where they are ready to launch local production. On July 10, the German company Bionorica started constructing a factory for manufacturing medicines, including plant-based ones, in the environs of Voronezh. In four years, it will produce 15 million blisters of plant products each year. The investment will reach 2.7 billion rubles for the production stage.
SLY HUAJUi
The domestic manufacturers are trying to keep up – Evalar will launch a new factory for processing raw materials in Tyumen: it will process 500 tons of raw materials per year and produce 50 tons of pharmaceutical substances. However, the timing of the launch is not announced. The need for a new manufacturing site is associated with the need to scale up the production for the further expansion of sales markets. The arrival of the Chinese delegation of potential partners in May was of interest to the participants in the bio-cluster. “The Chinese manufacturers of plant substances are not perceived as competitors, but as partners capable of developing an infrastructure for growing natural raw materials,” notes Dmitry Belousov, Executive Director of the company Altai Biopharmaceutical Cluster.
Meanwhile, companies from China show a greater interest in the cultivation of medicinal plants. This year, the Chinese commercial and industrial company Huajui is planning to plant medicinal plants in Primorye, on 67 hectares of land. The company has big plans for wild medicinal herbs and Chinese plants in the Far East of Russia. “Our pharma producers are interested in growing raw materials exclusively for their own manufacturing needs, since the domestic market is larger the external one. If raw materials are ever sold to Russian manufacturers of dietary supplements and medicines, then in minimal quantities only,” said Barry Yen, the owner of the Hong Kong company Coffee and Tea, specializing in growing tea and coffee trees abroad.
The manufacturers of dietary supplements understand that supplements are not enough for living, so they diversify their production. The above mentioned company Evalar increases the proportion of drugs in its portfolio. “As a result of five months of 2017, the share of medicinal products in the company’s turnover reached 11%, and we are planning to bring it to 15% by the end of 2018,” announces the chairman of the Board of Directors of ZAO Evalar, Natalia Prokopieva.
Read more: https://www.pharmvestnik.ru/publs/lenta/v-rossii/badretsy-diversifitsirujutsja-prnt-17-m8-895.html