Pliva

completed

The project supports the growth and strategic development (the "Project") of Pliva d.d. (the "Company" or "Pliva"), the leading pharmaceutical company in Central and Eastern Europe (CEE). The purpose of the Project is to finance the Company''s corporate investment program which targets to further strengthen Pliva''s original research capabilities in order to maintain its leading position in CEE markets and to continue its rapid expansion into Western Europe and the United States. Pliva is the only pharmaceutical company in the region which is successfully carrying out original research, and which has a globally recognised and marketed product (Azithromycin). Pliva''s strategy for continued growth and development is to: (1) focus on the core pharmaceutical business while divesting from non-core activities (such as foodstuffs and cosmetics), (2) increase competitiveness of the core business through investment, particularly in R&D and technology (investments in fixed assets 1994-1998 totalled US$240 million equivalent), and (3) focus on further international expansion through acquisitions (recent acquisitions include pharmaceutical companies in Poland and Czech Republic), and through organic growth via branded and generic products.Pliva''s investment program will include a construction and outfitting of a new 22,500 square meter Research and Development ("R&D") facility. Currently the Company''s R&D is conducted in three different locations and suffers from significant space limitations. Consolidation of R&D activities in one state of the art facility will increase efficiency and multi-disciplinary interaction. The layout and infrastructure of the new facility will ensure that all Pliva''s R&D activities will be performed in compliance with the international quality requirements (GLP). The investment will also represent a significant improvement in the working conditions of the scientists by increasing laboratory space per scientist to 26 square meters per scientist from the current 8-10 square meters (the world standard is 25-40 square meters). The total project cost is estimated at approximately US$ 113 million equivalent, and includes a construction of a new building, building equipment and installation, (such as ventilation, and heating), and laboratory equipment. The project completion is targeted for the end of 2002.