A pill from VEB
Moscow, October 5, 2015
Vnesheconombank (VEB) reported that it would extend a credit worth 14.6 billion rubles to pharma company R-Pharm. A credit agreement was signed at the International Investment Form in Sochi on October 2, in the presence of Prime Minister Dmitry Medvedev. According to VEB, funds are to be used for the construction of a pharm-substances plant in Rostov the Great and the second stage of the finished pharmaceutical products plant in Yaroslavl. Moreover, a part of the credit is to be used to complete R&D work on seven original medications of R-Pharm, the state corporation reported.
According to VEB, investments in all projects of R-Pharm amount to 19.7 billion rubles. Out of them, 5 billion rubles are to be invested by the by company; VEB Chairman Vladimir Dmitriev was cited by TASS as saying. 9 billion rubles out of the credit amount are to be invested in research and development, he said.
VEB does not disclose the terms of extending the credit. R-Pharm’s representative declined to comment.
Who will get the money?
R-Pharm is involved in developing, manufacturing and distributing pharmaceuticals. The company is owned by its Board Chairman Alexei Repik. It has three functioning plants in Russia, with one plant being under construction. There are three subsidiaries in Turkey (a plant is also under construction here), and a plant bought from Pfizer in Germany. In 2014, CJSC R-Pharm’s earnings amounted to 55.9 billion rubles and its net profit was 7.7 billion rubles (data by SPARK-Interfax).
An issue of opening a credit line for R-Pharm to fund these projects was discussed at a meeting of VEB’s Supervisory Board (Dmitry Medvedev heads it) on September 24, as it follows from the transcript at the Government site. Providing support for R-Pharm’s projects will be highly instrumental in developing our own pharmaceutical sector in Russia, creating high-tech production facilities, new jobs and of course saturating the market, explained Mr. Medvedev at the time. “The money is provided as part of project finance, the Government site said.
In August of 2015, R-Pharm already received 500 million rubles worth of credit from the Industry Development Fund of the Industry and Trade Ministry for manufacturing substances in the Yaroslavl region to treat cancerous and bone tissue diseases. The company invested 548.7 million rubles in this project; scheduled expenses including the credit from the Industry Development Fund are another 740.5 million rubles. Production of two types of substances are to start in 2017 and 2021, the company’s Director General Vasily Ignatjev told Vedomosti earlier. A bio-analogue is to be manufactured on the basis of one of them and an original medication - on the basis of the second one, he also said at the time.
Such significant investments are propitiate to R-Pharm’s scale of business, believes Director of the Center for Social Economy David Melik-Guseinov. The company is dynamically developing and is entering the international market, so it needs funds for a large-scale integrated full-cycle production facility, explains the expert. R-Pharm synthesizes molecules for manufacturing high-margin original medications, knows DSM Group Director General Sergei Shulyak.
Klepach: factual dynamics of GDP is lower than a potential one
Sochi, October 3, 2015
SOCHI, October 3. /TASS/. Factual dynamics of Russian GDP is a lot lower than a potential one and economic potential is diminishing. This is an opinion voiced by VEB Deputy Chairman Andrei Klepach in the course of the International Investment Forum in Sochi.
“Factual dynamics of GDP is lower than a potential one. As a result of what is happening now our potential GDP is dwindling, that is, conditions for a future economic growth are deteriorating”, he said.
Mr. Klepach believes that in order to change the situation for the better we need to loosen monetary policy. “A more difficult question is how to do it. It is one of dilemmas and not only of the Russian Central Bank but also of others. In my opinion, to soften the policy head-on by way of reducing interest rates sharply in all directions would be wrong”, he said.
Such a step won’t result in easing credits to enterprises and in bringing about economic recovery but in a strengthened currency exchange rate. “Then we can start raising a question of toughening a regime of currency operations, introducing currency control, so a long chain of problems will follow”, continued Klepach.
In his opinion, the Russian Central Bank should go along a path of using non-traditional instruments for supporting investments and small-sized enterprises. He added that they were being used but not in sufficient volume.