Sustainability Report 2014 Lek d.d.

Company Profile Sustainability Report 2014 – Lek d.d. 16 1.3.3.3 Lendava site The Lendava site comprises the Anti-infectives Production unit and a Packaging Center. Lendava is the leading site for the manufacturing of potassium clavulanate the key ingredient of a broad-spec- trum antibiotic, one of Lek’s and Sandoz’s leading products. At the Lendava site we also manufacture gentamycin sulphate. The manufacture is based on standard biotech- nology which is the result of the company’s own know-how. In 2014 we again achieved a 10% production growth as a result of modernization of technological equipment and process improvements. Accordingly, all market needs were met and the competitiveness of our products was enhanced. A further reduction in production cost and improvement of energy and environmental performance was driven by additional investment in production capacities, auxiliary in- frastructure and other improvements in the technological processes. The site successfully passed all inspections. At the Packaging Center Lendava (PCL), the filling and packaging of pharmaceuticals which are then supplied to more than 60 countries worldwide takes place. The Packaging Center Lendava is among the fastest growing Sandoz production plants. In 2014, we packaged more than 2.5 billion tablets and capsules and significantly increased our capacity with two new high-capacity pack- aging lines. The Packaging Center Lendava is one of the youngest Sandoz plants within the entire global production network. The establishment of the plant reaches back to 2007 and the first batches for the market were dispatched at the end of 2008. In 2014, the Lendava packaging unit with 12 modern packaging lines for solid pharmaceutical forms became one of the largest packaging facilities within Sandoz and the number of employees exceeded 170. The Lendava facility continues to strengthen its position as one of the major economic entities in this part of Slovenia as the number of employees who come mainly from the local community, is growing constantly. The vision of the facility is to become the best Sandoz packaging plant with a high level of customer service. The main objectives are efficient management of packaging complexity and supply of generic portfolio, high responsive- ness to changing market needs and internal flexibility. Simon Reãnik, Head Packaging Center Lendava Investment in capacity expansion and packaging warehouse "In 2014, Sandoz adopted an important decision with regard to the future development of the Packaging Center Lendava. The almost EUR 25 million investment in the expansion of our plant is also one of the largest single investments at Lek, comprising the construction of a high-bay warehouse and auxiliary facilities. The Lendava packaging center has since been consi- dered within Technical Operations as one of the two key packaging facilities for the entire Sandoz." Gizela ·tampar, Head Lendava Production (Anti-infectives) Environmental improvements in Lendava "We have improved a number of environmental aspects of manufacturing anti-infectives. With additional invest- ment and modernization we successfully reduced the specific use of groundwater for the purpose of cooling of production processes. We also redirected the outflow of used cooling water from a small recipient into the Mura river and started to further exploit the waste flue gas heat from the incineration plant."