Read the Conversation
EF: What are Grupo Somar’s priorities for 2024?
DC: In 2022, Grupo Somar acquired the Perrigo Latam operations, now known as Quifa Mexico and Quifa Brazil. During the first year, our challenge was integrating both companies and overcoming cultural and geographical differences. Since we were similar in size, with three plants each and roughly identical revenues, we view this merger more as a joint venture than an acquisition.
Now, in 2024, we have overcome the challenges of aligning processes and are focusing on building a common culture. On March 1st, we will be inaugurating our new offices, which are designed around the concept of hybrid space.
In 2023, the market experienced its first post-pandemic year without COVID spikes. While we were not able to sustain our double-digit growth from the past four years, we achieved a solid 5.0% group growth, exceeding the industry's growth rate of 5.5%. Our focus is on continuing growth and making strides in the pharmaceutical market.
EF: Could you elaborate on how Grupo Somar’s footprint and portfolio increased following the Quifa acquisition?
DC: Our group has six production plants and six companies, including Serral, Lakeside, and Advaita. With the addition of Quifa, we have welcomed Quifa, Gelcaps, and Diba in Mexico. Each entity has different targets and segments, covering every pharmaceutical form in our production except for injectables. According to IQVIA, we are the second-largest pharma company in Mexico by units. In 2024, we aim to return to double-digit growth, positioning ourselves among the top three CDMOs, as a leader in private label and number one in dermatology RX. We aspire to consolidate as a company, expand our presence, and venture beyond Mexico, leveraging near-shoring and increasing exports to the US.
The competition in generics is growing, especially with the arrival of more Indian companies in the country. We are forming new international partnerships and collaborating to harness growth. During the pandemic, we observed an increase in the impulse market, which focuses on low-priced brands without medical visits. Our challenge is to continue growing in this segment, aiming to be the most innovative and leader-oriented company.
Last year, we had a record launch of 13 new products, and now the challenge is to consolidate these launches and make them successful in 2024. We have extended our well-positioned vitamin C brand with a zinc variant, and our new venture into urology, especially with our key product, Ridalox, a combination of Dutasteride and Tamsulosin, was a success.
This year brings an exciting launch: Eufenil Nite, the first-ever generic combination of Ibuprofen and Diphenhydramine. This popular product from the US is known for alleviating pain and promoting sleep. It is a unique addition to our strong impulse market brand in Mexico. Presented as soft gels, this innovative product, launched just two weeks ago, targets nighttime pains, aiming to revolutionize this overlooked segment in Mexico.
EF: What makes Grupo Somar the perfect partner in the field, and how are you building strategic collaborations and increasing product access in the country?
DC: Considering our recent acquisition of Quifa, we have become a more diverse company. This incorporation has added a significant segment of CDMO, or contract manufacturing. As a top three player in the field, we produce nearly 100 million units annually for international clients. With our six production facilities and diverse manufacturing capabilities, we are well-positioned to be a key partner for companies entering Mexico or seeking to manufacture here for other markets. We sell products to major pharmacy chains in the US, showcasing our ability to handle substantial production volumes. This move into CDMO marks a shift from our previous focus on brand building, and now we see ourselves as a powerhouse in this segment. Our workforce has more than doubled to around 2800 employees, reflecting our increased production capacity. With this, we are poised to be leaders in this crucial segment, especially benefiting from near-shoring and the influx of new companies entering or strengthening their presence in Mexico.
EF: How is Grupo Somar leveraging the country’s capacity to develop healthcare solutions of the future with all the capacity you have built production-wise? How are you leveraging the country’s potential as an innovation hub?
DC: Before acquiring Quifa, we operated a pilot plant in Mexico City. Following the acquisition, we made the strategic decision to consolidate and relocate our expanded pilot plant and R&D center to Ramos Arizpe, establishing a state-of-the-art facility with over 70 personnel dedicated to research and development. Over the past three years, we have invested more than 120 million pesos in production innovation, resulting in a robust product pipeline of over 60 items. This figure has doubled in the last two years, enabling us to formulate products in various pharmaceutical forms. While our previous focus was primarily centered on oral solids, we have diversified our capabilities significantly.
Our objective is to continue launching 4 to 6 products annually while upholding our high standards. In addition to our R&D efforts, we are actively pursuing new partnerships on a global scale. As a result of our strengthened position as a top-two player in Mexico, we view ourselves not only as a launching platform for other companies but also as essential partners for those entering the Mexican market.
EF: Why is a dollar invested in Mexico better than anywhere else?
DC: Mexico's future looks promising for several reasons. Strong macroeconomics, well-managed finances, and the autonomy of the Bank of Mexico contribute to a stable economic foundation. Despite potential changes in administration, this macroeconomic trend is expected to continue. Beyond politics, the pandemic highlighted the importance of self-sufficiency in logistics and supply chains, leading to a surge in nearshoring. Mexico, being close to the largest world economy and with improved labor specialization, is strategically positioned for this trend. Over the past few decades, Mexico has transitioned from relying on oil to becoming a service- and production-oriented country. With diverse specializations in industries like pharma, aerospace, cars, electronics, and more, Mexico offers growth opportunities. In pharma, especially, there's immense potential given the high medicinal consumption in the US. To stay competitive and capitalize on near-shoring, investments in new production facilities, R&D, and innovation are crucial for the future success of the pharmaceutical industry.
EF: What are the central items needed to rebuild trust in the Mexican healthcare system?
DC: Gaining trust in the pharmaceutical industry, especially in Mexico, is challenging. Despite the remarkable progress made with COVID vaccines, skepticism persists, with some viewing pharmaceutical efforts as merely profit-driven schemes. In this scenario, generics play a crucial role. People often do not understand why drugs cost less after the patent expires. As a generic company, our mission is to democratize healthcare by offering quality products at affordable prices.
Our vision is to impact the well-being of Mexican patients, considering that a significant portion of the population lives on very limited income. With innovations and new launches, we strive to make life-saving solutions available to more Mexicans to bridge the accessibility gap. While Mexico's healthcare system may lack state-of-the-art infrastructure, we believe that improving access to essential drugs and building personal connections with the public can contribute to rebuilding trust in the pharmaceutical sector. Our focus is on addressing genuine needs and making a positive impact.
