Greenfield Investment for Pharmaceutical Packaging Firms - Essay Example

• Around 50 small and large pharmaceutical product manufacturers operate plants in Serbia; the largest are Hemofarm, Galenika, Zdravlje, Jugoremedija, Habitpharm, Srbolek, and many others.
• The total pharmaceutical market of Serbia in 2010 was estimated at $ 1.08 billion, and the sector is forecast to grow to $ 1.63 billion by 2015.
• Local pharmaceutical manufacturers supply 50 percent of the requirement, and imports meet the other demand. The per capita expenditure on drugs is 130 Euros, in comparison of 300 Euros for western European regions
• The industry is highly segmented, based on raw materials such as plastic, paper, aluminumoil, glass, converted paper and foil, jars, syringes, and others
• Segmentation is also seen in the types of containers such as vials, ampoules, inhalers, powders, tubes, special closers and dispensers, caps, tamper-proof caps, etc., and in the packaging process, types of drugs packed, and other factors.
• These segments indicate the huge variety of material and machinery, which packaging firms must provide.
• Pharmaceutical firms give importance to the quality and integrity of the packaging firm, dispensing errors and dosing, and the industry is very price sensitive. Hence, the packaging firms need to control cost, and maintain very strict control over the dosing and dispensing in each pack.

The PESTLE analysis is used to analyze external environmental forces that impact an industry. The forces analyzed are political, economic, social, technology, legal, and environmental (Williamson, et al, 3-4). In this section, the PESTLE analysis is applied to the pharmaceutical packaging industry in Serbia.

Political:

• Serbia enjoys a high level of political support from the government and foreign firms are guaranteed equal legal status and support as local firms.
• Since the past five years, Serbia has received more than $ 16 billion FDI. Various taxes such as Salary tax at 12%; corporate income tax rate at 10%, Property tax 0.4%, VAT 18% are the lowest in the region.