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Local knowledge and an extensive regional network, combined with a personal approach, made UHY a strong partner for the regional distribution arm of an overseas pharmaceutical company.
Founded in 1990, Caplin Point Laboratories is an Indian producer of over-the-counter medicines. Unusually, it does most of its business in Latin America. In the early 2000s, the business decided to skip the crowded regional export markets of South Asia to focus its efforts on less competitive environments in the Dominican Republic and Guatemala.
Caplin’s founder, C.C. Paarthipan, braved drug lords and unhappy competitors to set up a base in the region, but early challenges no longer exist. Today, Caplin Point has over 2,800 product licences across the globe and operates in 11 Latin American countries (along with various parts of Africa).
Although it remains headquartered in Chennai, Caplin Point’s main business involves supplying nearly 4,000 pharmacies in Latin America. Effective distribution is key to achieving this and is undertaken by Caplin Point’s regional distribution operation, Neoethicals. Through Neoethicals, Caplin Point medicines are distributed to wholesalers and retailers in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Ecuador, Chile, Venezuela, Paraguay and the Dominican Republic. It is a substantial operation, employing around 300 people and billing between USD 60m and USD 80m per year.
Such a large and diverse operation requires a considerable amount of cross-border cooperation, not least from outsourced professional service providers. Neoethicals is based in Guatemala, where UHY’s involvement is coordinated by René Pérez Ordóñez, director at UHY Pérez & Co, Guatemala City. As Neoethicals’ regional operation grew, it required support and local knowledge across other Latin American countries.
The strength of the UHY network in the region was a key consideration for Neoethicals. Work was referred to other UHY member firms as the company expanded, firstly to UHY Auditores y Consultores, S.A. in Honduras. More recently, member firms in El Salvador (UHY Asesores Y Consultores, S.A De CV) and the Dominican Republic (UHY Canahuate Calderon & Asociados) have contributed to the successful expansion of Neoethicals and the wide infiltration of Caplin Point products into Latin American markets.
The extensive UHY member firm network in the region collaborates on the company’s financial and fiscal accounts and uses its wide local knowledge to offer authoritative legal and financial advice. UHY member firms provide information on matters of importance to Neoethicals’ business model, such as extended payment terms.
Mr Hector Valdez, general manager of Neoethicals, says, “We work with UHY because of their professionalism and coverage in the region. We have a wide distribution network across several countries with their own fiscal and legal requirements, so it is good to work with a business with local expertise in each of our markets.”
Neoethicals considered a Big Four accountancy firm, but felt they needed more personal attention as they expanded, particularly as the Latin American pharmaceutical market is less stringently regulated than elsewhere.
Looking To The Future
In just 13 years, Neoethicals has gone from being a new entrant in the Latin American market to a leading supplier of consumer pharmaceuticals. Its expanding product list in the region includes vitamins, antibiotics and cardiovascular medicines. Caplin Point plans to move further into South America and north into the US in coming years.
UHY member firms have supported that expansion and helped to smooth the integration of new wholesalers and pharmacies. “We need an accountancy firm to help us minimise risks and comply with different tax regulations and policies – UHY member firms have been of great assistance here,” says Mr Valdez.
Thanks to UHY Pérez & Co, and UHY colleagues from the other countries of operation, Neoethicals now benefits from reclassified accounts and an improved presentation of financial statements. And despite sometimes challenging markets, Caplin Point has a better understanding of its reach and impact across Latin America.
“With UHY member firms, we have achieved good management of fiscal, legal and statistical controls,” says Mr Valdez. “It is reassuring to know that, if and when we target new markets in the region, a UHY member will be able to supply us with the local information we need to progress.”
For more information, contact René Pérez Ordóñez, UHY Pérez & Co, Guatemala: firstname.lastname@example.org
UHY in The Pharmaceutical Sector
With an increasingly ageing global population (set to reach 8 billion by 2025), growing levels of lifestyle-related chronic diseases and advances in medical technology, there are both significant challenges and substantial opportunities in all areas of healthcare. UHY member firms around the world have a thorough understanding of the health sector and work with a variety of organisations and businesses, from public healthcare providers to international pharmaceutical companies.
In the pharmaceutical sector, UHY experts provide a comprehensive range of services to both large and small companies, from traditional accountancy services to financial and legal advice, regulatory and compliance management, and the protection of intellectual property rights. UHY member firms have expertise in the stringent regulations that govern the sale of many pharmaceutical products and are experienced in the intricacies of pharmaceutical exports, pricing pressures, supply chain management and generic/brand considerations. Alongside this, the global nature of the UHY network means that clients can benefit from insight into the development of best practice around the world.