Czech builder profits from Russian ‘medical security’ drive

Companies|Real Estate
Tom Jones | 28.11.2011

Participation in construction of Russian state-backed pharmaceutical plant in the Lipetsk region, some 400 kilometers southeast of Moscow, has opened doors to new projects in Russia worth billions of crowns for Czech construction firm Unistav. Although the company is refusing to reveal any details about the projects, according to the news server E15.cz it has begun negotiating export credit from Czech banks.

“The development of the pharmaceutical industry is directly supported by the Russian federal government, which wants the country to become self-sufficient in the production of antibiotics, ant-cancer drugs and other important medicines,” Unistav’s export manager, Radomír Uhlíř, told E15.cz., adding that now Rafarma has proposed expanding cooperation with the Brno-based construction firm.

The 25,000 square-meter Rafarma plant is due to be completed in 2012 at an estimated cost of around €70 million. The factory is situated in the Terbuny special economic zone in the Lipetsk region, meaning the project receives certain tax breaks and other advantages.

“The project was initiated by the Zdorovye healthcare support fund and is one of the very largest projects in the medical industry in Russia in recent years … [and] is being implemented with the support of the Ministry of Industry and Trade, Ministry of Health and Social Development, and the administration of the Lipetsk region,” Rafarma CEO Alexander Shchavelev told the Interfax news agency earlier in the year.

Rafarma says that following the launch of full production at the Terbuny plant, Russian imports of medicines should fall by 30 to 40 percent.

Backing of the project by the Russian government as a strategic priority means the contractors, including Unistav, have had the advantage of favorable financing from the Russian state coffers in the form of credit from the state-controlled Vnsesheconombank. Unistav has thus not had to borrow from Czech banks, nor seek insurance from the Czech state-controlled insurer for exporters, EGAP.

“From this credit and partly from its own sources the investor has paid for all deliverables from Unistav,” Uhlíř told E.15.cz, adding that the Unistav has completed about two thirds of the contracted work at the Rafarma plant for a cost of just under Kč 500 million.

To date Unistav has completed the construction of the plant’s administrative center, packaging and storage unit, and construction of the manufacturing units is half completed. 

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