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Estonian factory produces Lego-type factories for pharmaceutical firms

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Harjumaa-based Pharmadule OÜ has found a niche in building expensive module-based factories for well-known pharmaceutical firms around the world.

The story behind Pharmadule’s business is that pharmaceutical companies rush to produce medicines as quickly as possible after they have received the relevant licences and before their 5–10 year patents expire. These extremely high-standard factories are an expensive purchase, but their uniqueness gives pharmaceutical companies a 1–2 year time advantage compared to so-called normal factories and therefore enables them to earn more money.

The roots of Pharmadule OÜ are in the Swedish-capital-based company, established in Estonia in 2005, which produced these kind of modules for its mother firm. The economic downturn and management mistakes led the Swedish firm into bankruptcy in 2011, and the Estonian managers decided to buy the Estonian factory from the Swedish firm. The Estonian company was able to find strategic partners in Europe in terms of sales as well as production unit providers, which was critical for their survival. It cut the staff and instead of hiring its own engineers, the company decided to outsource this service, meaning that it does not staff engineers as a fixed cost.

In addition to savings in time, there are other important advantages for these kinds of buildings. The failure risks to launch the factory on-time are minimum since documentation and quality-proof is in parallel with the construction of the modules. When the constructions are huge, the factory sends ready-made modules off to the client to start assembling and in the meantime carries on building the rest of the modules. One module is 60 square metres in average and the Estonian company has produced factories in sizes ranging from 2–140 modules. The price of one module is 100,000–150,000 euros, depending on the complexity of installation. The 7,200 square metre factory is able to produce about 200 modules annually with an employee force of 35.

The business is unique in Estonia, but the company has many competitors in the world. As the competition is getting tougher, the Estonian firm is offering its skills to other fields, including skidding and welding services and making module-based apartments in Finland. The experience of the pharmaceutical sector is of benefit because of its high standards.

So far it has built 318 modules for pharmaceutical firms in Switzerland, Ireland, Sweden, Lithuania, the Middle East, plus 62 apartment modules in Finland. Furthermore, 40 skids have been built for the US, China, Bangladesh, etc. Its 2012 turnover was 3 million euros, and it aims for a 3.5 million euro turnover this year.

Source: (2013) Tehas, mis toodab (miljoneid maksvaid) tehaseid. Ärileht, 10. aprill.