The Foundation Stone of Lek's new Production Plant in Romania

8. 7. 2002

Ljubljana, Targu Mures, 8 July 2002 – The Slovenian pharmaceutical company Lek d.d. laid the foundation stone of the new production plant in Romania in the presence of the President of the Republic of Slovenia and the highest representatives of the Slovenian delegation and the high representatives of the Romanian delegation, including the Romanian Minister of Health Mrs. Daniela Bartos. The investment worth $12 m will be built in compliance with the international standards of good manufacturing practice and it represents a step forward in the implementation of Lek’s strategy in this region. The new production plant will provide safe and quality antibiotics at reasonable prices. Lek will see to the systematic introduction of the elements of the environmental management. The new production plant will employ additional experts.

The international pharmaceutical company Lek d.d. with the headquarters in Ljubljana, Slovenia has been a 90% shareholder of the pharmaceutical company PharmaTech in Romania since January 2001. PharmaTech was founded in 1996 and it rapidly developed into one of the leading producers of antibiotics in Romania.

The acquisition of the Romanian company PharmaTech represents a synergy of production capacities and at the same time a starting point for Lek’s internationalisation in the region. In the year 2001 PharmaTech successfully integrated with Lek Group. Lek modernized the existing production plants according to the GMP standards and decided to construct a new specialised production plant for the production of cephalosporin antibiotics.

By laying the foundation stone of the modern production plants in Targu Mures Lek d.d. is following its strategic goals and carrying out the set objectives. The new production plant for the production of antibiotics will be built in compliance with the international standards of good manufacturing practice (GMP) therefore the company will be able to provide quality medicaments according to the international standards and at reasonable prices.

Lek has invested $12 m into the construction of the new building, which will be finished in the second half of the year 2003. The total sum of the Lek’s Romanian investment, the already invested capital and the foreseen second phase of this project, amounts to $30 m. The new production plant will give space for the production of oral antibiotics, product control, operative product development and storage place. On the basis of the Lek’s comprehensive environmental policy and with regards to the conformity certificate for the system of handling the environment (ISO 14001 standard) the company will see to the systematic implementation of the environmental management elements.

In the first quarter of 2002 Lek d.d. and Lek PharmaTech achieved impressive sales results in the Romanian market. With the consolidated sales of $4,85 m the company gained 4.2% of the Romanian pharmaceutical market share. Its sales results put it in the fourth place among the pharmaceutical companies in Romania and it is thus becoming a leading antibiotic company in the field of antibiotics in Romania. Our widest variety of products provide the Romanian medical profession safe, modern and quality treatment therapies of various bacterial infections at reasonable prices.

By the year 2006 Lek d.d. plans to export more than half of the medicaments produced in the new production plants. The products will be exported mainly to the Central Eastern and to the South Western European markets.

Today there are 160 people employed in Lek Pharma Tech. The new production plant will provide employment mainly for the people with high education and expertise.

The President of the Republic of Slovenia Mr Milan Kučan emphasised in his speech that he was pleased with the events which confirmed the economic collaboration between Romania and Slovenia, which was not limited to the barter, but was carried out also in the more demanding forms of co-operation. The laying of the foundation stone for the Lek’s new production plant in which the company was investing its funds, knowledge, the development of the latest products, the implementation of international standards of good manufacturing practice and internationalisation of its operations, was a harbinger of a long-term collaboration in accordance with the international business standards. Mr Milan Kučan concluded his speech by saying that with the new investment Lek was not cutting down the jobs, but was creating new ones.

This press release contains statements and conclusions based on projections of Lek’s future business operations. These estimates are derived from the best information currently available. In case these forecasts prove unreliable, the actual results could prove different from those projected.

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For additional information, please contact: Miša Komar – Žiberna, Lek’s Corporate Communications Telephone: + 386 1 580 22 43