The new management brought in at the Chilean pharmaceutical companyLaboratorio Chile in 1995 has turned around the firm's fortunes, reports the Investor's Business Daily of the USA.
A few years ago sales growth had come to a standstill, mainly as a result of poor pricing strategies. The new leadership reversed the pricing policy and lowered generics prices by 25%, and then raised prices for its branded products by around 30%. There was a reduction in jobs of around 10%, credit policies were tightened and production lines were rationalized.
In 1996, sales jumped 67% to $108 million and earnings grew 218% to $12 million. Lab Chile's retail sales account for around 11% of the market in dollar terms, but 21% in volume. Its generics market share is close to 50%, according to Latin American analysts, who say that the firm's strength is its diversity. Lab Chile sells more than 700 products, of which 250 were introduced between 1990 and 1995.
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