TBY talks to Marco Avella Palacio, CEO of Grupo AVE, on the regional pharmaceuticals market and the company's expansion into Asia.

Marco Avella Palacio
Marco Avella Palacio attended Colombia National University to study Civil Engineering. He is the Founder and President of Vitrofarma laboratory. He is an active participant in the Senior Management and Company Presidents Program at Los Andes University and Sabana University. He is a Member of the Board of various major domestic pharmaceutical industry associations, including Asinfar and Andi.

Grupo AVE has a presence in 20 different countries. How has the company evolved over the years?

In 1928, my father established a veterinarian and pharmaceutical laboratory, and thus I grew up in a unique environment. In 1978, I set up my first company with the concept of differentiating the services and products from the multinationals that were already operating in Colombia. At that time, it was very expensive and not profitable to produce injectable and maquila products in Colombia. The industry needed a reliable company to offer such services. At that point, and thanks to the support of a European company, I managed to provide packaging services to almost all of the 15 multinationals operating in the Colombian industry. This helped me to build up a reliable profile. After some years and a number of political events, investors saw great opportunities in Mexico thanks to its geographic position and the size of our domestic markets. Then, the Colombian pharmaceutical industry all but disappeared, and most foreign companies headed to Mexico. That represented a tough challenge for me; companies would offer to invest large amounts of money in production facilities only to later on decide that they would import everything from Mexico. At that point, I decided to shift the company's activity, and I began to register my own products and commercialize them for pharmaceutical companies in Colombia. I managed to get economic support from a multinational company in Colombia to push forward my plans. Although the beginning was difficult, after I set up Vitalis in 2000 I was able to register new products and sell them to multinationals within the pharmaceutical industry. I opted to start commercializing them in other countries, such as Ecuador and Peru, in order to avoid competing with companies in Colombia that were already my clients. That was the turning point in our history. Today, we are present in about 20 countries, with a special focus on markets such as Mexico, Venezuela, and Chile.

What was your financial performance in 2012?

In 2012, we sold products worth a consolidated $105 million, and although we are not a very large company, we export over 50% of what we produce. In fact, there are only around 25 companies in the country that export to five or more markets, and we are among them. Over the years, we have evolved to what we are today; a family-run company in which we all work together to bring stability to the development of the enterprise. Today, our enterprise has over 1,000 employees and partners, and seven companies comprise Grupo AVE.

What are the future plans of the company?

We will heavily invest to triple our activities in Mexico, in terms of both laboratories and packaging lines. In fact, we have developed a number of pioneering products and packaging designs, complete with higher levels of sterilization and hygiene. We also have to remember to set ourselves apart from our competitors in many countries, which is a reflection of our extensive experience in the sector and our perfect knowledge of both its players and market needs. Therefore, we will continue investing in R&D for our laboratories, while at the same time purchasing new infrastructure in countries such as Argentina, where we are about to buy a $10 million laboratory to start exporting to new markets. We want to take advantage of the Argentinian pharmaceutical regulatory framework. In this regard, we will continue registering health registers, which now total over 1,000. The company's expansion in foreign markets is also very important for the future, as we aim at to establish 70 health registers per year and enter new markets in Asia and Europe. We are already active in Vietnam, the Philippines, and Thailand, where we believe we can set up a production plant in the near future. Finally, we are working to develop a biotechnological project, which is the most important future project for us.

“There are only around 25 companies in the country that export to five or more markets, and we are among them."