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EBRD helps Armenia’s Liqvor go for growth

By Katarzyna Kukula

Liqvor, a privately owned pharmaceutical producer in Armenia, has undergone an exemplary transition from small-scale company to regional leader thanks to an EBRD investment of US $1.5 million and Early Transition Countries Fund donor support.

Liqvor’s success has many faces: quadrupled revenues, achieving the first ever Good Manufacturing Practice certificate in the TransCaucasus and growing exports to many post-Soviet countries and beyond.



How EBRD support is helping Liqvor to become a regional leader.

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A pioneering producer

Across the region, consumers are the biggest beneficiaries of EBRD-Liqvor cooperation This innovative pharmaceutical producer has brought generic medicines to the market and made it possible to access drugs more easily and cheaply.

Liqvor was initially a “garage” based business run by two local scientists-turned-entrepreneurs, Dr Sergey Matevossyan and Hovhannes Ghazaryan, who quickly found a prescription for success. They found a niche in the market and introduced local equivalents of branded medicines, while at the same time helping the pharmaceutical industry grow.

Breaking old habits

Armenia’s pharmaceutical sector traditionally suffered from a lack of transparency, low numbers of domestic companies and a prevalence of smuggled drugs. Breaking the old habits of the healthcare system was not an easy task in 1991 just as the Soviet Union collapsed.

Yet that year Liqvor became the first private pharmaceutical company in Armenia and then also the first in the CIS to manufacture infusion solutions in plastic packaging according to European standards.

Between 2004 and 2005 the EBRD, with support from the Early Transition Countries Fund, agreed to provide a US $500,000 equity investment for the purchase of a new production line for single-dose injections in small glass vials, the design of a factory and “clean rooms” necessary to obtain an international standards certificate.

A comprehensive growth strategy enabled Liqvor to extend its product range and facilitate exports with ophthalmic solutions in small plastic bottles.

Soon after the EBRD’s Small Business Support (SBS) team made technical assistance available. Liqvor could now acquire a computerised financial management information system for better financial and tax accounting, cost accounting, inventory management, procurement, sales and human resources processes.

A key breakthrough

In 2010, with a mezzanine capital investment of US$1 million from the EBRD, Liqvor made a breakthrough and raised a further US$2.9 million from local banks, allowing the Company to install state-of-the-art equipment which was the platform for them to successfully achieve Armenia’s first Good Manufacturing Practice

Dr Matevossyan is proud of their achievements. “Cooperation with the EBRD as an institutional investor has greatly benefitted our company,” he said. “We implemented corporate management culture, we implemented financial discipline, and we got acquainted with new tools that were unknown to us.”

Since the EBRD first invested in Liqvor, sales have quadrupled – from around US $1 million in 2005 to US $4 million in 2013. With 96 highly qualified employees at present, the company is planning on hiring more experts. Their growth in exports looks set to continue too, with the company considering entering new markets in Vietnam and Yemen. Liqvor is an excellent example of EBRD partnering with good local entrepreneurs and assisting them though long-term financing and advice to grow, export to new markets, and now to attract strategic investment.

“Our aim is to be a regional leader in the production of effective medicines. We want to build a healthy society, and while doing so increase our production capacity and exports,” Dr Matevossyan said.

“We will create new jobs which will help Armenia’s economy to recover, increase our share of Armenia’s pharmaceutical industry, and grow the country’s exports.”

Contributors to the Early Transition Countries Fund have included Canada, Finland, Germany, Ireland, Japan, Korea, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Taipei China and the United Kingdom. The 14 donors have contributed around €85 million to the Fund since it was established in 2004.

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