Sigma aims for top chemist slot

By Karyn Scherer

An Australian-based pharmaceutical wholesaler is aiming to topple New Zealand's biggest chemist chain, Unichem, from its perch by the end of the year.

Sigma, which runs the Guardian chain of chemists in Australia, last year emerged as the victor in a bidding war for the struggling Amcal group. This month it completed a takeover of the New Zealand branch of the group, as part of its plans to set up a separate division in this country.

In New Zealand yesterday to catch up with local staff, Sigma's manager of public and investor relations, Gerry Bullon, said the company was confident it would overtake Unichem within the next eight months.

Unichem, which is linked with Swiss-based pharmaceutical manufacturer Zuellig, claims to be the largest pharmacy chain in New Zealand, with 125 members, including its smaller Unichem Life brand.

Unichem chief executive Tim Roper yesterday played down his rival's claims, saying he believed Unichem still beat Sigma on the basis of turnover.

The Amcal purchase makes Sigma Australia's ninth-largest retailer, with combined sales of more than $A1.3 billion. Although it cannot directly own pharmacies, its acquisition of related businesses means it is becoming an increasingly powerful player in the pharmacy trade.

Unlike the Australian group, Amcal has been thriving in New Zealand. It has boosted its membership from 80 to 88 over the past six months, and is aiming to reach 100 by the end of the year. Sigma is also trying to establish Guardian in New Zealand, with hopes of signing up 35 independents by the end of the year.

It has bought a clutch of other pharmaceutical businesses in New Zealand over the past year, including the 80-member Pharmacycare group, national wholesaler and distributor Russells Pharmaceuticals, and Wellington-based wholesaler Pharmacy Wholesalers. Together with Russells, it also manages the 56-member marketing group Pharmaceutical Promotion Services.

The purchases give it a fifth of both the wholesale and retail markets in this country. It is also the only wholesaler to service both the Australian and New Zealand markets.

One of the company's aims is to boost sales of its own products through its own chains. At present, only 3 to 5 per cent of all its retail sales were its own-brand products, said Mr Bullon. It hopes to boost this to 10 per cent over the next two years. "In England, 30 per cent of grown-ups walking out of a Boots pharmacy have a product with Boots' name on it. If we can get it up to just 10 per cent here, we will double our manufacturing business."

The company expects to appoint a chief executive to run its New Zealand businesses within the next few months. Its New Zealand arm will be renamed Sigma New Zealand, as part of its plan to fully list on the Australian stock exchange within the next 12 months. It is already listed on the Exempt Market, run by Austock.

It is believed to be keen to buy a large manufacturing business first, and Mr Bullon confirmed an announcement was due soon. He said the group was not planning a New Zealand listing at this stage, although it was not ruling out such a move.