Ivo Usmiani (JGL): We are rapidly developing the B2B segment to reduce dependence on the Russian market

JGL Group is the largest Croatian pharmaceutical company in domestic ownership, founded back in 1991 as the first private pharmaceutical company in the country. One of the founders and owners Ivo Usmiani heads the Management Board and, together with business partners, has built a pharmaceutical company with nearly 1,300 employees from a small laboratory with about twenty people. He considers people to be the greatest value of the company, which today operates in about 60 markets, with nearly 85 percent of revenue generated from the export of its products such as Aqua Maris, Meralys, Vizol S, and Dramina.

Recently, he was named the most successful Croatian entrepreneur for 2023 as part of the global ‘EY Entrepreneur of the Year’ program, which was an occasion to discuss his journey, JGL’s business in various global markets, and the challenges facing the pharmaceutical industry in an era of product abundance and global competition.

You have been named the most successful Croatian entrepreneur for 2023. Can you share some of the lessons you have learned as an entrepreneur in the pharmaceutical industry?

– It was a great honor for me to receive this prestigious award, especially knowing who else has been nominated this and previous years; all are exceptional entrepreneurs with impressive business stories and results. I perceive this award as recognition for all JGL employees, as well as our families, who have each contributed in their own way to the company. There are several important lessons we have learned over the past thirty years. First and foremost, you must be innovative. The second lesson is that there can be no compromise regarding quality. The last, crucial lesson is that people must come first. Only good, skilled, and motivated people can move mountains.

Your vision is for JGL to become a leader in the field of sterile pharmaceutical forms for the eyes and nose and in the use of seawater for health purposes. What specific steps are you taking in these efforts?

– The vision that inspires and guides us requires us to have a distinct technological and therapeutic focus, as well as strategic competence in such an indication niche. All steps we take in the development, production, and sales segments are dedicated to fulfilling that vision. In just the last three years, we have more than doubled our investments in R&D. The revenue investment rate is at six percent, which is significantly higher than the Croatian and European averages, all aimed at creating innovative and high-quality products in the fields of flu and cold, ophthalmology, and dermatology that meet the needs of our users. We continuously invest in production capacities and technologies to ensure reliable and efficient production.

With the INTEGRA investment, a new production facility has recently started operating within Pharma Valley. What new markets will you aim to open thanks to this facility?

– With the INTEGRA project, valued at 53 million euros, we have expanded existing capacities for the production of sterile sprays, drops, and aerosols by 60 percent or 40 million products per year. Additionally, as part of the project, we built a new facility that houses a modern research and development laboratory, a pilot plant, and a new quality control department. We must not forget the third key aspect of the project, which is the robotic logistics-distribution center in the Kukuljanovo business zone.

What are the main challenges for a successful entry into Western markets, especially the USA?

– Western markets can be roughly divided into the EU, which is now our domestic market and has unified regulations and rules, and all other markets, primarily the USA, which have different requirements that the export portfolio must meet. The third pillar of our business, the B2B model, is extremely important for further internationalization and territorial diversification. It has a growth rate of 27 percent compared to 2022, and we are rapidly developing it to reduce dependence on the Russian market. In the European Union, we have built a very strong business network and a strong image in most countries with out-licensing models of our products and contract manufacturing in highly specialized technologies for key partners. Western markets are extremely competitive, especially markets like the USA. The biggest challenge is to select products that we can differentiate and that customers will recognize, i.e., products in which we have clear competitive advantages. Additionally, regulatory requirements are different than in the EU, and it is necessary to invest additional time and resources in upgrading the portfolio.

What challenges does JGL face when expanding into new markets, how do they assess the Asian market, who are their biggest competitors, and how do they cope with labor shortages? Find out in the new issue of the printed and digital edition of Lider.