July 2 (SeeNews) - Multinational pharmaceutical and life sciences company Bayer expects sales growth in Romania, Bulgaria and Moldova this year, despite the coronavirus outbreak and a severe drought, a senior Bayer representative told SeeNews.
"We expect a single digit growth for Bayer in the country group in 2020. Despite the turbulent business environment in the second quarter, we continue to achieve our important milestones in all our divisions which allows us to maintain sales estimations in line with our budget," Sercin Giray, senior representative of Bayer for Romania, Bulgaria and Moldova told SeeNews in a recent e-mailed interview.
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"Forecasting is very difficult in such crises and are based on our current observations and assumptions in our markets."
In the Pharmaceuticals division, the company estimates that it will end 2020 on budget, as the temporary rise in first quarter sales is expected to be followed by difficult conditions throughout the rest of the year, said Giray, who is also managing director of Bayer Romania and CFO of the country group.
After a very strong first three months, Bayer saw its pharmaceutical sales drop in the second quarter, mainly due to a considerably lower number of patients going to hospitals and pharmacies due to fear of getting infected, and due to many of them relying on their pre-existent medicine stocks.
Another challenge Bayer has faced because of the coronavirus pandemic as a drug provider for hospitals was the restricted or totally banned access of patients to the medical units.
However, the company found a way to work around some of these hurdles by relying on a new model of operation based on digitization.
"As part of ongoing efforts to reduce strain on the healthcare system during this difficult time, remote engagement with healthcare professionals and telemedicine options are also expanded. We had to switch face to face interactions with remote interactions, and conferences, symposiums and meetings with online platforms," Giray said.
Digitization will play an important role in all areas and countries, as the crisis brings some opportunities for new work models, she opined.
For example, plans for enhancing digital marketing in Bayer's Crop Science division were accelerated by the Covid-19 crisis, and planned customer events, trainings, field days, learning centers activities were transferred into digital streams, channels and platforms.
Despite this workaround, the division's performance in the three countries stands to be affected by the severe drought in 2020.
"Around half of the of the cereals cultivated area were impacted with different degrees by drought facing situations from complete loss of crops to crops which will produce 30%-50% vs. a normal year," Giray said. "Mainly our cereal fungicide sales were negatively impacted by this situation, due to reluctance of farmers to further invest in low production crops and decreased disease pressure due to drought."
The company's seed processing site in Sinesti, Romania is fully operational, though due to Covid-19 the company had to take several protective measures, set its priorities and focus on critical aspects of operations.
"We have a significant investment in Romania, namely the Sinesti seed processing plant. Year over year, we continue to invest in our plant between 2 and 4 million euro ($2.2-$4.5 million). The site is focused now on the implementation of a production system which includes lean manufacturing. We want to develop the site into a worldclass seed production site," Sercin Giray said.
Short-term investments in all three countries will be focused on continuous improvement initiatives linked to safety, production and internal organizational effectiveness.
Investments under the pharmaceutical division will continue to be focused on bringing global medical trials to the country group. Bulgaria and Romania have become one of the major clinical trial countries for Bayer, engaged in therapeutic areas like ophthalmology or cardiovascular.
Looking ahead, Sercin Giray thinks that the SEE pharmaceutical and agricultural inputs market have a lot of potential for growth, despite current challenges.
The regional agricultural inputs market is still developing with a lot of potential in growth for Bayer's corn seed business, as more and more farmers move to the use of certified seeds and understand the value of planting premium seeds, Giray said.
"We need to continue to increase the yield we can get from one hectare of field and in the process reducing to usage of natural resources, minimal field tillage and maximizing yield potential using the right technology."
In the pharmaceuticals area, Bayer expects public budgets to remain at the level of previous years at best due to measures financed in the context of the coronavirus crisis. Bayer is concentrating on specialized markets such as those for rheumatology, immune-oncology, hematology drugs, which have developed extremely well in recent years. Cardiology and diabetes drugs have a strong footprint in Eastern Europe as well, the senior representative of Bayer for Romania, Bulgaria and Moldova said.
Also, in the area of innovative medicines, especially expensive therapies, new access and payment models are expected to emerge and to be adopted. However, the time periods needed for pricing and reimbursement approvals from the governments must be shortened, in order to ensure timely and cost-effective access to innovative medicines, Sercin Giray said.
"Unfortunately, the levels of contribution payments by the patients are usually high, being one of the highest in the European Union and as a consequence reducing the access opportunity to those innovative medicines for patients."
Sercin Giray took the lead of Germany-based Bayer in the three countries on June 1 from Pascal Cassecuelle, who will continue his activity as head of supply chain EMEA for the Cropscience Division. She started her career at Bayer in 1999 and joined the company country group as CFO in September 2017.
Bayer's operations in Romania, Moldova and Bulgaria reached a turnover of over 335 million euro in 2019, out of which the Crop Science division has 62%, the Pharmaceuticals division 27% and Consumer Health division 11%, the company announced last month. With the seed production facility in Sinesti, Romania, Bayer achieved seed exports of over 65 million euro in 2019.
Bayer has over 480 employees in the three countries, with the main offices located in Bucharest and Sofia.
The Bayer Group is managed as a life science company with three divisions – Pharmaceuticals, Consumer Health and Crop Science – and an Animal Health business unit. In 2019, the group employed around 104,000 people and had sales of 43.5 billion euro.
($=0.8913 euro)