Yuria-Pharm, one of Ukraine’s leading pharmaceutical companies, has acquired the pharmaceutical company Reka-Med in Uzbekistan, using EUR10 million in financing from an existing loan from the European Bank for Reconstruction and Development (EBRD) after it changed its purpose.
“The EBRD loan will allow Yuria-Fram, which exports 30% of its products (of which 15% are to Uzbekistan), to produce pharmaceutical products locally for the Uzbek market and free up about 10% of its capacity in Ukraine to produce products more critical to the domestic market,” the EBRD said in a Thursday press release.
It noted that buying the Uzbek company to switch to local production was the best strategic response to Russia’s unleashed war in Ukraine, which has made exports more difficult and costly.
“This agreement will improve the availability and affordability of drugs in Ukraine and Uzbekistan. It will also improve Yuria-Pharm’s profitability and allow it to diversify its production risks by locating production outside Ukraine,” EBRD Managing Director for Eastern Europe and the Caucasus Matteo Patrone said in a statement.
Purchase of assets abroad and entering the international level of activity will make “Yuria-Pharm” more competitive, the banker concluded.
The EBRD recalled that Yuria-Pharm’s main operating company, Yuria-Pharm LLC, which produces drugs and medical devices, signed an initial loan agreement with the EBRD in May 2019. The document provided for the company to receive EUR25 million financing in two tranches: the first reserved tranche of EUR15 million was for upgrading packaging lines, launching the production of a cancer drug in affordable individual doses and implementing energy efficiency measures, while the second, unreserved tranche of EUR10 million was for production improvements. It was this tranche that, once reserved and reassigned, was used to acquire Réka-Med.
The EBRD is the largest institutional investor in Ukraine. The bank promised to invest at least EUR3 billion in the real sector of the Ukrainian economy in 2022-23. In 2022, the EBRD invested EUR 1.7 billion, with another EUR 200 million mobilized from partner financial institutions. The loan to Yuria-Pharm is backed by a EUR2.5 million first-loss guarantee from the EBRD’s Special Crisis Response Fund.
According to the EBRD, Yuria-Pharm is among the top five pharmaceutical producers in Ukraine and sells its products all over Ukraine and exports to more than 40 countries.
In 2021, the company increased its net profit by 30.2% to UAH 883.5 million while revenues increased by 36.1% to UAH 4 billion 562.9 million.
Yuria-Pharm LLC was founded in 1998; its statutory fund is UAH 44.1 mln. The final beneficiaries with equal shares are Natalia Derkach and Nikolai Gumenyuk.
Reka-Med Farm LLC (Tashkent) was commissioned in 2006 as a joint Uzbek-Russian-British venture. According to the information on its website, it produces infusion intravenous drugs. Now the company has one line, the maximum average annual capacity of which is 18.15 million vials
