With minor expansion, competition moves forward

Considered one of the storefronts among the various businesses of the BTG, the Brazil Pharma should look in the mirror to its competitors ' expansion in regions where already exerts leadership, as North and northeast of the country.
According to analysts, with the State heard by the reduction in investments this year to focus on the company's financial health, the expectation is that Brazil Pharma can make room for competitors in markets where it exercises leadership. The company is a leader in the North, with the Big Ben, and in Bahia, Sant'Ana flag, and one of the largest in the Midwest.
"Companies like Droga Raia Drugstore Pacheco and São Paulo (DPSP), concentrated in the Southeast, began to expand their business to the Northeast and other regions of the country," said Guilherme Assis, Brazil analyst Plural. The cearense pay less, which is well positioned in the Northeast, also has an expansion plan, which foresees the opening of about 90 stores this year, reaching 750 units. The Group intends to exceed 1,000 stores by 2017.
Survey of the Brazilian Association of networks of Pharmacies and Drugstores shows that Brazil Pharma ranked third in 2013 by number of stores, behind the Drogasil Streak groups and DPSP. To pay less is the fourth.
"The major networks generally open about 100 stores per year. Maybe, in the short term, have no impact, but in the medium and long term the Pharma Brazil could lose market share, "said André Fontoura, an analyst at BES Securities retail team. BR Pharma opened only 15 stores in 12 months accumulated in until the end of March.
Competition. In the coming months, the movement of consolidation in the sector should be resumed. The American giant CVS hired at the beginning of the year the Country Investment to prospect business in the country. The company has initiated conversations with the DPSP, that are in progress. "There's plenty of room for the major networks move on the independent groups," said Fontoura.
According to a market source, the Ultra group, which entered the market of retail pharmacist in October with the purchase of Extrafarma network, in the northern region, proposed joint venture with the Brazil Pharma to open pharmacies in gas stations of Ipiranga flag.
The conglomerate has ambitious plans to grow from 2015, through acquisitions or organic growth, taking advantage of the Ipiranga stations to invest in pharmacies. The retailer refused the proposal of Ultra.
BTG's company created a business model with strong presence in regions where the major retailers have little concentration. On the radar of multinational companies in the sector, the Brazil Phama has the expectation of recovering banks until the end of the year. To achieve this goal, will have two choices: change hands or go shopping.