Farmak in talks to open plant in Sumy region

Ukrainian pharmaceutical producer Farmak (PFTS: FARM UZ) is in negotiations with the Sumy Regional Administration to open a production plant and  to relocate some of the plant’s capacity to the city of Shostka in the Sumy region, Kommersant reported this morning. Sumy Regional Administration Chairman Yuriy Chmir said talks have been underway for two months about opening the site of a former film production facility to Farmak. A Farmak spokesperson said the company was planning to make an initial investment of USD 15 mln over 2-3 years, adding that blueprints were ready and the company was awaiting construction permits. Ruslan Patlavskyy: In our view, relocating Farmak’s manufacturing capacities should have a long-term positive effect as it should: (1) mitigate Kyiv municipal authorities’ concerns regarding potential negative impact on the environment due to its current downtown Kyiv location; (2) optimize the manufacturing process by investing up to USD 100 mln into the project, allowing the company to bring its manufacturing standards closer to those in the EU; and (3) potentially sell its current land plot in downtown Kyiv at a profit.