Super-Pharm is planning to establish 50 branches in Poland over the next four years at an investment of $30 million, Super-Pharm CEO Lior Reitblatt told “Globes”. The drugstore chain is also in advanced negotiations to with a local Chinese entity to set up a joint Chinese chain, the next market Super-Pharm is considering.
Super-Pharm will try to penetrate more countries over the next five years, as part of its strategy to become as a global chain in a market lacking any international entity, mainly due to regulatory barriers.
Super-Pharm marked Poland as its future growth engine long ago. The chain plans to enter Far Eastern and South American markets later, where, in contrast to Europe, there are no laws against company, i.e. an incorporated chain, ownership of pharmacies. The unsuccessful attempt by large chains like Britain’s Boots (LSE:BOOT) to establish drugstore chains in Japan and Thailand helps Super-Pharm’s future global plans. The market structure created by national regulations has left no international market player.
“Most of the world is barred,” Reitblatt said. “We examined possibilities in Turkey, Greece and other markets, but all those countries ban a single entity from owning more than one pharmacy. There was an opening in Poland, because ownership of pharmacies was unrestricted. A new government solved a later problem.”
Another regulatory problem concerning barriers to product mixes was solved by obtaining two separate operating licenses, under which Super-Pharm operates stores within stores within the business entity it set up in Poland.
Super-Pharm currently operates two branches in Poland. Now that it has overcome the bureaucratic hurdles and obtained the necessary permits to open the chain, Super-Pharm plans to open six branches shortly.
Super-Pharm Poland CEO is Ronny Drori, formerly Super-Pharm COO. Once the Polish business expands, Reitblatt may become president of the international group, to whom the CEO of Super-Pharm Israel will be subordinate.
Super-Pharm, which operates 97 branches, will post revenue of NIS 2 billion this year, compared with NIS 1.8 billion in 2001. Despite the recession, same store sales rose 6%. Reitblatt said revenue per sq.m. was $1,100 this year.
Super-Pharm will have 100 branches in January 2003. Sources inform “Globes” that the chain has signed leases to open 30 more branches within the next four years.
Published by Globes [online] - www.globes.co.il - on November 14, 2002