Lek Strengthens its Position in China

23. 10. 2001

Beijing, Ljubljana, October 23, 2001- The Slovene minister of Health, Prof. Dr. Dušan Keber, together with Lek’s president of the Board of Management, Metod Dragonja, officially opened Lek’s new representative office in Beijing. The opening of the new representative office strengthens Lek’s long presence on the Chinese market. While continuing the sale and purchase of active ingredients, Lek plans on increasing its sales of finished pharmaceutical products in 2002. Representatives from the Slovene Ministry of Health and Ministry of Economics and Chinese government officials attended the official opening in Beijing.

The Chinese market is one of the largest and fastest growing markets in the world. Sales in 2000 totaled about $10 billion. Analysts estimate an annual growth rate of 15 percent, and the average per capita consumption of drugs is $ 10 and increasing. Sales of antibiotics and drugs for treatment of infectious diseases represent 40 percent of the Chinese pharmaceutical market. This market is a major challenge and a tremendous opportunity for Lek with its extensive portfolio of antibiotics. This is especially true for Amoksiklav, our flagship product, and the right product for the Chinese market.

Lek has been on the Chinese market since 1984. We started marketing Amoksiklav in 1993. In 2000, our sales in China totaled $ 2.8 million, and we project our sales in 2001 to reach $ 4.5 million. In 2000, the Chinese market represented 1.2 percent of Lek’s sales totals. Clavulanic acid, the active ingredient of Amoksiklav, represents 80% of our total sales to China.

Lek’s fastest sales growth, at 50.8 percent, took place in the region Asia, Africa and Latin America. Top sellers in this region, which includes China, were Amoksiklav and its ingredient, clavulanic acid, which accounted for 70 percent of total sales in these markets.

Lek with the opening of its new representative office in Beijing strengthens its position in China. Aside from the major activities of its representatives in China – the sale and purchase of active ingredients – Lek plans to reinvigorate its sales of finished pharmaceutical products this year, with Amoksiklav leading the way.

Lek currently employs three Chinese nationals and a Slovenian representative. In the future as sales increase and our market expands, we plan to employ new qualified personnel.