SKOPJE, FORMER YUGOSLAV REPUBLIC OF MACEDONIA
, July 20, 1999 — An important privately-owned pharmaceutical
manufacturer in the Former Yugoslav Republic of Macedonia will be able
to expand its access to international markets with a financing package
from the International Finance Corporation (IFC) and the European Bank
for Reconstruction and Development (EBRD).
The combined financing being provided by the two institutions consists
of a loan of EUR 17.4 million (approximately US$17.7 million) to Alkaloid
AD Skopje, a joint stock company manufacturing pharmaceuticals, chemicals,
cosmetics, coatings, and food products. This transaction represents IFC's
sixth and the EBRD's second private sector industrial investment in the
"The investment represents an excellent opportunity for IFC and the
EBRD to help a forward looking, domestically-owned Macedonian company to
broaden its markets and improve its international competitiveness,"
stated James D. Wolfensohn, President of the World Bank Group, who signed
the agreements for IFC in Skopje today.
"FYR Macedonia needs strong private sector manufacturing companies
to help re-integrate the country into the international economy in the
wake of the Kosovo crisis," said Horst Köhler, President of the EBRD.
"The timing of this investment makes it particularly important,
in view of the damage to the country's manufacturing base and the greater
need for pharmaceutical products in the region. This project will help
to restore trade links throughout the Balkans."
Alkaloid will use the proceeds of the financing to upgrade and modernize
its pharmaceutical production facilities, in order to meet Good Manufacturing
Practice (GMP) standards, which are necessary to sell in international
The project is expected to cost a total of €35.4 million (approximately
US$36 million). The €8.7 million (approximately US$8.9 million) loans
being provided by each institution include options to convert the loans
into equity of Alkaloid.
Founded in 1936 with 15 workers, Alkaloid was the first plant in the Balkan
region to produce pharmaceutical products. Through subsequent mergers and
acquisitions, it increased its scope of activity to include the production
of a variety of finished drugs, medicinal herbs, cosmetics and fine chemicals.
Alkaloid was privatised in 1995 and has become one of the most successful
companies in the country and a leader in the domestic pharmaceutical sector.
Both the EBRD and IFC play active roles in their member countries throughout
the Balkan region. Since the country became a member of both institutions
in 1993, each has made numerous investments there.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.
Since its founding in 1956, IFC has committed more than US$ 21.2 billion
in financing for its own account and has arranged US$15 billion in syndications
and underwriting for 1,852 companies in 129 developing countries.
The EBRD was set up in 1991 following the collapse of communism, to aid
the transition from centrally planned to market economies in central and
eastern Europe and the Commonwealth of Independent States (CIS). The EBRD
is owned by 60 shareholders: 58 countries, the European Investment Bank
and the European Community, and operates with €20 billion in capital.
To date, it has committed €12.4 billion and mobilized an additional €22.1
billion in private investment.