New Management Sharpens Lab Chile

24 June 1997

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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