The leading pharmaceutical company in Latvia Olainfarm AS will increase export volumes in new markets by at least 80% in the next five years by introducing at least 10 new products into production, increasing production capacity and making large investments in research and development. In June 2023, Olainfarm AS concluded an agreement with the Development Financial Institution ALTUM and SEB Bank for co-financing in the state support program "Investment loans for large and medium-sized merchants with a capital discount for the promotion of competitiveness", which provides for a total of 31.75 million euros to be directed for such purposes.
"The economic security and development of Latvia is vital for us to be able to respond both to the current challenges in the world and to use the growth opportunities in the future, raising the general welfare level of the society. Olainfarm is an important player in the Latvian pharmaceutical industry and shows by its example that modernization, new products, new export markets, investments in energy efficiency and a well-considered increase in production capacity, combined with healthy ambitions and state support, create an excellent platform for growth of the company and through this also for a faster breakthrough of the Latvian economy," says Ilze Indriksone, the Minister of Economy.
"Latvia is the only country in the Baltics that can truly be proud of a strong and global level pharmaceutical industry. That is our value and also an opportunity to be used. The goal of Olainfarm is to become a TOP10 European pharmaceutical company in its product groups, providing patients with necessary medicinal products and products at all stages of healthcare. Therefore, with the support of our shareholders and also state programs, we work very purposefully both on the development and registration of new products in new export markets, as well as on the modernization of production and the increase of energy efficiency, in order to promote the long-term development and competitiveness of not only our economy, but also the economy of Latvia globally," emphasizes Juris Bundlis, the Chairman of the Board of Olainfarm AS.
The major investment project "Investments for the introduction of new products in production for the diversification of the market and the development of "green" technological processes" provides for investments in several directions, including new production lines, research, development and implementation of new products in production, modernization of laboratories, increasing export volumes, increasing energy efficiency and in the implementation of renewable energy technologies. Currently, the product range of Olainfarm AS includes more than 100 different products and intermediate products, but the goal is to introduce at least 10 new products into production with the help of the ALTUM programme and increase the production capacity by at least 20%, almost doubling the export volume. Besides, at least 65 highly qualified jobs will be created, almost half of which will be in the field of research and development.
““The purpose of the large investment project support program is to stimulate the implementation of projects important for the Latvian economy, therefore, we are pleased to finance the next step in the growth of Olainfarm, which will allow the company to produce new high-added-value products in a modern and sustainable production facility, increase production capacity and export volume. Olainfarm is an excellent example of how the company promptly adapts to the new geopolitical situation, focusing itself to new export markets and even increases its growth ambition in the new conditions. In general, the amount of loans approved in the programme has already reached 70 million euros, which will help to implement new, large investment projects in woodworking, printing, furniture production and other areas. ALTUM also provides loans with a capital discount, which is an attractive financing solution for entrepreneurs, in four European Union Recovery Fund programs aimed at energy efficiency, digitalization and the construction of affordable rental housing,” indicates Reinis Bērziņš, the Chairman of the Board of ALTUM.
As part of the program, at the beginning of next year, by investing 11.29 million euros, Olainfarm AS will also start the construction of a new, the most modern chemical and pharmaceutical wastewater treatment facility in the Baltics. The main goals of this project are to reduce the amount of wastewater to be treated, increase efficiency, automate the wastewater treatment process and its control, as well as separate rainwater treatment from domestic and industrial wastewater.
In addition to investments in production and product development, Olainfarm AS also invests in green energy projects, energy efficiency and energy independence, contributing to the achievement of climate neutrality goals. Work on the creation of a solar panel park will begin already in this summer in the territory of Olainfarm AS with investments of 3.3 million euros. The area of it will be ~4.2ha and the installed capacity will be up to 3.2MWh per year. Solar energy will provide up to 40% of the company's average annual electricity consumption, and up to 80% in the summer season. Besides, the reconstruction of heating networks and steam networks will be carried out in the value of more than 3 million euros, reducing heat losses. At the moment, work is continued to create a liquefied gas connection in order to diversify primary energy sources and increase the security of the company's energy supply and the continuity of production processes.
The company also plans to invest in other projects, such as digitization, productivity and development of quality control laboratories, product registration in new markets and the clinical trials required for this, as well as in the development and production technologies of new active pharmaceutical substances and finished medicine dosage forms. The volume of investments in investment projects already approved or being in the development process, including ALTUM's large investment programme, reaches 40 million euros, but in general, it is planned to invest at least 100 million euros in the development of Olainfarm AS in the next five years.
About Olainfarm AS
Olainfarm AS, the subsidiary of AB City AS, is one of the largest companies in the Baltic states with 50 years of experience in the production of medicines and chemical pharmaceutical products. The company produces high quality, safe and effective products for Latvia and the world. Olainfarm's products are exported to more than 60 countries. The consolidated turnover of the company group in 2021 reached 137,7 million euro. Approximately 840 employees perform daily work in the company, ensuring a continuous product production process in 24/7 mode. Olainfarm AS has been awarded the Gold category in the Sustainability Index and has been assessed as a Family Friendly Company.