SARAJEVO, BOSNIA-HERZEGOVINA, March 15, 1999
— The Executive Vice President of the International Finance Corporation,
Peter Woicke, today signed a loan of US$2.67 million for the Bosnalijek
pharmaceutical company as part of IFC's strategy of investing in privatizing
companies in order to build the private sector of Bosnia-Herzegovina.
Bosnalijek, d.d. is the only manufacturer of over-the-counter and prescription
drugs in Bosnia-Herzegovina. IFC's investment consists of a senior loan
to modernize the company's facilities for production of solid oral drugs,
most of which currently are imported.
Bosnalijek was established in 1951 as a state-owned enterprise and is now
owned 50.03 percent by its management and employees, and 49.97 percent
by the state of Bosnia-Herzegovina. Subject to privatization of the company
and the consent of the General Assembly of the Shareholders, IFC's loan
is convertible to equity.
Mr. Woicke praised the company for re-building into one of the most profitable
companies in post-war Bosnia-Herzegovina. IFC has sought out companies
like Bosnalijek that have overcome setbacks, become profitable, and have
the potential to effectively compete with other regional players. Mr. Woicke
added that IFC's decision to consider an equity position in the company
should be a positive message to potential strategic investors about the
ability of the management team and quality of operations at Bosnalijek.
The lack of investment in infrastructure and new technologies during the
socialist era, a production program that was mainly focused on manufacturing
under licensing agreements, and significant damages sustained during the
1992-95 war presented Bosnalijek with substantial challenges. Since 1996,
the company has undertaken an aggressive program to rebuild and modernize
its manufacturing facilities, while ensuring good manufacturing and laboratory
practices. Today, Bosnalijek's development program includes more than 124
products, ranging from solid oral drug forms to ampoules and ointments
and the company appears set to become one of the region's main producers
of generic drugs.
IFC Trust Funds provided by the Swiss government financed the first audit
of Bosnalijek in accordance with International Accounting/Auditing Standards.
IFC, part of the World Bank Group, fosters growth in the developing world
by financing private sector investments, mobilizing capital in the international
financial markets, and providing technical assistance and advice to governments