Luis Abel Zercero Mañon
Director General
Laboratorios Keton
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View from the Top

Local Support for Foreign Market Entrants

Wed, 09/09/2015 - 15:32

Q: What market requirement did Laboratorios Keton set out to fill and how has the market changed?

A: Laboratorios Keton started out as a manufacturer of generics and now works mainly with assembly laboratories on behalf of between eight and ten foreign companies, some of which are market leaders. Currently, Laboratorios Keton has 140 employees, some with almost 35 years of seniority, of which 26 are highly specialized technicians. Previously, no specialization was required from employees, the only requirement being a minimum knowledge of the pharmaceutical industry. The situation has changed drastically, and today highly qualified specialists are required in each division of the company. There was also a lack of regulation within the industry and now we are directly regulated by 20 different authorities. COFEPRIS is currently carrying out an in-depth audit of all distribution and storage companies in order to ensure that they have specific facilities to accommodate the industry. Many of the national companies have merged, and others have been absorbed by international companies. For this reason, there are sufficient skilled individuals in the country to promote the development of the industry.

Q: How do you help companies enter the local market?

A: Laboratorios Keton has represented several foreign companies over the last 12 years, providing not only representation and legal support, but also manufacturing facilities. We implemented this business plan as a reaction to the local plant rule. As a result, many foreign companies could only operate through hosts in the country, who registered brands on their behalf under a domestic company name. We have worked within the pharmaceutical industry for approximately 56 years, so the company name generates trust within the pharmaceutical world. We also ensure that the products we import fully comply with all quality control, labelling, and security requirements in the country of origin as well as in Mexico. Legally the registrations belong to Laboratorios Keton but we have an agreement in which we pledge to return the registration when requested or at a specified point in time. In order to begin collaboration, we have a policy of visiting the main offices and manufacturing plants of a given company. Under no circumstances do we take unnecessary risks by agreeing to collaborate with a company using raw materials with uncertain origins or a company that fails to meet quality standards.

Q: What is your main production strategy?

A: Today we are mainly dedicated to assembly, which represents 80% of our income with the remaining 20% coming from the laboratories we represent. In Mexico, active ingredients are rarely produced, mainly originating from India or Italy. Currently, COFEPRIS is carrying out an in-depth audit of all the distribution and storage companies in order to ensure that they have specific facilities to accommodate the pharmaceutical industry, such as refrigeration chambers, and that they follow all the necessary requirements in handling the drugs.

Q: How has your production strategy changed?

A: We currently manufacture beta-lactam antibiotics and oral cephalosporins in two different areas within the same plant, but we are trying to integrate both areas. We only use well-known laboratories that comply with all the COFEPRIS guidelines in order to eliminate potential risk for ourselves and our clients. Moreover, if the product encounters a manufacturing problem or fails quality control testing, we are responsible for that product and we are therefore obliged to cover the corresponding costs, so the substitute laboratory must be approved by us as well as by our main client. At the moment there are few laboratories dedicated to assembly since much greater profit is generated by the sale of the product than by its manufacture.

Q: What are your plans for expansion of Laboratorios Keton?

A: We are considering opening a new plant within the next five years in order to manufacture mainly antibiotics and possibly oncology medications and other high specialty products, which will require an investment of approximately US$5 million. We are also bringing our own products to market, but this will be a long term plan since this would currently place us in direct competition with our own clients. We are planning to locate 60-80% of the investment for the plant from public funds, such as CONACYT, due to a general lack of private funding sources.