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For Menarini, the new frontier is East Asia

Singapore - To become a giant, one doesn’t have to turn to the banks. It is possible for a company to use its own reserves to finance expansion and investment. And it is possible to be a family-run multinational and to live a good life

Singapore - To become a giant, one doesn’t have to turn to the banks. It is possible for a company to use its own reserves to finance expansion and investment. And it is possible to be a family-run multinational and to live a good life. That is Menarini’s lesson, the Italian pharmaceutical giant who is still growing: “We are very pleased: we will end 2017 with revenue of €3.6 billion, an increase compared to the previous year despite the expiry of the patent on a drug with a 130 million turnover per year.”

Pietro Giovanni Corsa, who is the Italian pharmaceutical group’s managing director, in the office that supervises Menarini’s business in Asia, explained the company’s numbers: “We have matched this market that is expanding quickly.”This is why the group, which was created 131 years ago and has been headquartered in Florence since 1915, decided to focus on East Asia: “China represents 60% of the Asia-Pacific drug market, and it is growing,” explained Luca Lastrucci, who has led this emerging market from Singapore for over two years and will now handle the Italian company’s new expansion.

However, the road to the conquest of China is not all downhill, because we need strong investments, and we need to overcome the many obstacles that Beijing tends to raise: “We have started a scientific research programme worth €15 million”. It is the first step towards reaching the ambitious target of one billion in turnover in the Asia-Pacific region. Menarini’s centre of gravity is shifting abroad because it wants the market to do so: Corsa again explained, “Italian revenue is set to contract. In five years’ time it will be below 20% of our revenue. On the other hand, there are interesting markets in other countries: for example, in Turkey we are growing by 26% and have reached 150 million in revenue, in Central America we are the second largest group in the sector... We are a small-medium Italian company that is competing with the global multinational giants of the sector. However, we will always remain the leader in our own country.” Italy weighs heavily on the heart and on the wallet: the group pays taxes (“2 billion in total, 70-80 million in taxes every year in Italy,” Corsa said) and hires here (250 workers in 2016 alone). “If we lost almost all of Italy,” Corsa reflected, “we would still be here... of course every once in a while we think ‘But who is making us do that?’ Because there is a negative attitude towards the company here in Italy, and we face continual aggression from the tax authorities. But we want to be of lasting value to the country.”


THE EXPANSION STRATEGIES
“We have several open dossiers, all over the world: we must continue to grow.” And so Menarini may soon announce some upcoming acquisitions, which it will always make with its own cash: “We are not interested in seeking liquidity on the market: we have it.” Corsa is convinced that the company’s character as a “family multinational” is a winning model. “We are agile; just think of how we came to Singapore. We closed the negotiations in 2011, because through our direct relationship with the owners, we made a winning move, and were ready to buy Invida, cheque in hand.”

Lucia and Alberto Giovanni Aleotti are the second generation of the family to run Menarini, and from their point of view, being listed on the Stock Exchange or allowing a fund to enter the company is not an option: “The presence of the family is fundamental for us.”

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