Manufacturing of drug products today requires a very responsible approach, both as regards compliance with the Good Manufacturing Practices and ensuring that produced drugs have high quality, safety and effectiveness. For 20 years, InterPharmTechnology Group® holds a prominent position in the market of pharmaceutical technological equipment in Russia and other EAEU member states. In an interview Armen Paravyan and Dmitry Dyakonov, co-owners and top managers of InterPharmTechnology Group®, were asked questions about the first steps of their company and ways to achieve high level of technology support for pharmaceutical industry in accordance with GMP standards.
Mr. Paravyan, when we reviewed the list of customers of InterPharmTechnology Group® over the past 20 years, we found that, in one way or another, it included most of the important companies in the industry. Despite being the founder and owner of the brand that is well-known among the specialists, you seem to shun publicity. Why? In fact, this is the first interview you have agreed to in all these years and even then we suspect that this was largely associated with the 20th anniversary of the Group.
Indeed, I really didn’t (and still don’t) want to have my name associated with doing business. I came to the business from academia, where I was pursuing my postgraduate studies at the Department of Nervous Diseases in the Central Continuing Medical Education Institute (currently, Russian Medical Academy of Continuing Education) in the early 1990s, when the country was undergoing profound transformations. When a researcher truly wants to discover the secrets of nature, he knows that the nature would never deceive him, and if he correctly and honestly formulates his questions, it will provide the answers in a similarly unambiguous, clear and honest way. For a real scientist, it would be unacceptable to use the concepts of purchase and sale in his relationship with the nature.
I had to reconsider some of my approaches and views in order to adapt to the business environment. But I handled this consciously without betraying my internal values, and I looked for solution in a methodical way based on the terms of the problem.
Despite the fact that we succeeded in building a fairly successful business, deep down in my heart, I am still a scientist. This is why I prefer my name to be associated with creativity and science rather than doing business.
Do you think that doing business is discreditable?
There was a time when I really thought so, but after starting the business and becoming fully involved in it, I realized that this requires no less science and creativity than any other field.
Doing business can be defined as an activity aimed at systematically making profit. However, we know that the concept of profit is purely economic and can be expressed in monetary terms. No such concept exists in natural sciences. The world can be studied through sensory perception and scientific knowledge. When it comes to doing business viewed in terms of profit, we have to deal with a construct that accompanies the humankind over a short historical span and was generated by the economic environment in which the humans find themselves at this stage of their development. Once the concept of profit disappears, the science that was preoccupied with it all this time will disappear too.
I think that too many people unreasonably waste a tremendous amount of their energy and talent to improve “systematic profit-making.” This will continue as long as money remains the supreme value in their heads. However, we can already see clear signs that the old profit-based concept is in crisis all over the world. However, this is a separate issue. In that sense, while for me doing business is not something discreditable, I still feel closer to pure science and pure art.
Then why did you choose this “systematic profit-making” activity?
Good question. My personal business history is longer than the history of InterPharmTechnology® brand. The education background required me to be closer to the subject that I understand better. So, it had to be at least the pharmaceuticals, if not the medicine. I tried my hand at many different areas, gained some initial positive experience in the exports of equipment and imports of medicines, and had some developments in the area of technology and equipment for industrial manufacturing of finished medicines. So, I decided to use these developments to establish a business that would supply pilot equipment to central factory laboratories (CFL).
This was the beginning of the next chapter in my personal business history. In 1998, amid the intense sales of equipment, I came to the idea of establishing Plastintek, a manufacturing company, and this allowed to build the concept of a group of companies under the common brand of InterPharmTechnology. Later, after entering the international markets, we renamed it to InterPharmTechnology Group®.
Mr. Paravyan, over the past year, the trademark of InterPharmTechnology Group® was often associated with the slogan “20 Years of Exceeding Expectations.” It sounds somewhat immodest although, for a company, the 20th anniversary is certainly a good reason to praise its achievements. Whose expectations did you exceed and how would you comment on that?
You’re right. It is not for us to pass judgment on what we have achieved, but I can safely say that this phrase contains a bit of self-irony. Our customers can better judge whether we did or didn’t exceed their expectations.
For our part, we can say that, after 20 years of striving to meet the needs of our customers, we accomplished more than we had expected from ourselves. The very fact that, in establishing the business, I had to combine the incompatible (as a doctor and researcher, my highest values were honesty, thoroughness and integrity towards my patients, and this was in conflict with the common approaches to doing business in the 1990s), did not inspire much optimism. But looking back today, I can say that, over these years, we built a team that adopted something, which in my opinion was the most important – while using the concepts adopted in the business environment and fully applying their intelligence, deep down in their hearts, people remain honest both to themselves as well as to customers and partners.
In their work, they do not have to betray their values that are based on the inner sense of justice, which is always the same, because it is not driven by money and would never deceive. I often repeat that money is important but not at any price. If for the sake of money you are forced to give up something important, something that describes you as a human being, then you become something that you weren’t before. This means that first you sell and deceive yourself and, next, you will deceive your customer, your friend, colleague, etc. Where would you stop?
Our people are used to the fact that even the most financially-profitable transaction can be rejected if it threatens the reputation of a colleague or entire team, which ultimately is the same. After all, the key value is to preserve the sense of self-esteem. This is the most important part of corporate culture in our organization.
In any company, there are five major groups of beneficiaries critical for the well-being of your business. They include customers, suppliers, employees, government, and owners. At a short distance, you could probably trick one or some of them, and gain a financial advantage. But you cannot run a marathon with a sprint-like attitude and successfully reach the goal. As we look around and check whether everything that we do is right, we can see that, indeed, we are doing the right thing.
The reputation of our company enables us to look confidently to the future. Many companies that we all heard about had a wonderful take off over these years but, today, they are no longer around, and the market is flooded with their “orphaned” clients and customers.
It is a conventional wisdom that the main goal of any business is to make money. How does that square with what you just said?
It does not square at all. Money should be exchanged for your work, knowledge, skills and abilities, rather than for yourself. If people are not willing to pay for the former with a sense of happiness and delight, then you missed or failed to realize something very important.
Our employees are well aware of this and constantly work on improving themselves by raising their competence, sometimes during the long night hours, weekends, regular business trips in order to share their experience and learn from foreign partners. This also includes a very important aspect. Being well-educated and highly competent is not enough, it is extremely important to make sure that this professionalism is clear to your counterparties, whether they are your customers, vendors or employees.
To appreciate your superior qualities in all fairness and properly benefit from your proposals, they also need to be constantly trained by revealing to vendors their organizational shortcomings or demonstrating to customers the ways to improve their effectiveness. We are conducting our own educational events in the form of webinars and conferences at the exhibitions. This makes a part of our daily routine and represents a key component of corporate culture in our organization.
The primary goal of my business activities in InterPharmTechnology Group® is to give our customers what they expect from us for their money and a little more on top of it, so that they have only positive experience with our companies and come to us again and again. It is about achieving personal success in my desire to create and give something new to people, whether in science, new technology or art, by expanding the capabilities of my organization through its success. We learn by doing, achieve by pursuing. Any goal is good because you improve yourself on the way to reach it. The goal is just an opportunity to make yourself better than you are now.
President of InterPharmTechnology Group®, is that a title or position?
It is rather a title than position. Once, I personally headed our very first company as the General Director and was deeply involved in its day-to-day operations. But, being a creative person, I quickly found that such daily thorough monitoring of routine tasks consumes too much time, makes me feel extremely weary and prevents from generating new ideas and solutions for business development. Even the MBA degree did not help in my search for ways to optimize the management of complex activities in our companies. As I gained knowledge, experience and insights of our business, I realized that the B2B supplies of sophisticated technological equipment are a project-based environment and, after becoming deeply involved in that area, I and some of our key employees completed the project management courses.
We identified two perimeters in our management function, including current administrative and economic activities and project management for our customers. I couldn’t divide myself in two. Fortunately, I had an employee who worked with our company from its inception as a student and progressed in leaps and bounds. He was very proactive, engaged and committed. After starting as the sales manager, he was able within a few years to head the department of technological equipment sales, completed the project management training and, at some point, when I wanted to get fully involved in the establishment of yet another company and create InterPharmTechnology Group®, I found him competent enough to relieve me by taking over the management of InterPharmTechnology® for the time of setting up Plastintek, another company which is currently part of the Group. So, he became the General Director. Today, he is my business partner and I have every reason to proudly associate all latest achievements in increasing the supplies of technological equipment, attracting new customers and partners, with his skills, dedication and efforts.
There is no need to present Dmitry Dyakonov, as all our customers know him very well. Currently, he is the Executive Director and co-owner of InterPharmTechnology®, a part of InterPharmTechnology Group®. He is in charge of operations and supervises the projects to supply the technological equipment.
I am the Executive Director of other companies in the Group and, as the President of the Group, I retain the responsibility over key strategy issues of further business development in all areas.
What specifically are you involved in at this point?
Currently, I have several global tasks within the projects of InterPharmTechnology Group®.
First, InterPharmTechnology®, the leading company of our group, is experiencing a growth crisis. Together with the customers, the company’s staff is involved both in the factory acceptance tests (FAT) and site acceptance tests (SAT) for the supplied equipment. As a result, we recently began to face an acute shortage of engineering and technical personnel. In addition, as I noted earlier, a number of companies have become “orphaned” in the market and left without the support of vendors that had suddenly exited the market. Now, these companies are contacting us and believe that we can help which, on the one hand, makes us very pleased but, on the other, aggravates the shortage of qualified staff. We need to look for optimal strategies to address these issues without distracting the company’s management from current projects. To some extent, these issues affect strategic aspects of company’s development, and I am fully engaged in addressing them.
Secondly, we need to modernize the manufacturing in Plastintek, another manufacturing company of the Group. Depreciation of fixed assets over the past years requires ensuring their renewal and exploring new areas and ways for further development of the company.
Thirdly, I am currently heading Insert Project, another business of our Group which, in the future, will be transformed into its management company. Today, we use it as a site to test our IT solutions in order to scale up services for any enterprise of the industry in the future. Ultimately, this site should assume the management of integrated flexible digital solutions to support the routine services, while releasing the enterprises from their non-core operations. As you can see, we have no shortage of work or ideas.
Mr. Paravyan, what do you think about changes in the pharmaceutical market of process equipment for manufacturing finished medicines over the past twenty years?
In the 1990s, the main market for complex technological equipment was completely controlled by large, well-known European companies, as we lacked both specialists and companies capable of supplying, installing and launching high-tech imported equipment. However, this is where I saw the potential for future business growth.
If the equipment supplied and serviced by a foreign company would malfunction, the company had no other opportunity than to seek assistance from a foreign manufacturer. Often, the diagnostics and troubleshooting of equipment required an on-site visit by the specialists and engineers of the manufacturer, who sometimes had to wait up to a month just to get their Russian visas. Then they would make the trip, but the customer had to wait more for the arrival of spare parts and components required to eliminate the malfunction. If the customer had no qualified specialists capable of replacing the faulty component on their own, then it was necessary to wait for the arrival of foreign experts who, at that time, could be engaged in another project and another country. This resulted in the equipment downtime ranging from one to 4 months. Now, imagine the financial losses suffered by the customers, if their production lines manufactured no more than 3000 blisters per shift. Even a simple calculation would reveal the scale of such disaster.
Our strategic considerations were simple. By organizing qualified service and troubleshooting closer to the consumers, we could reduce downtime and win competition with many big players. We set ourselves the task to make sure that our specialist would arrive at the production site of the customer within 24 hours.
Ultimately, these considerations have fully proven themselves. We began to supply the equipment from selected vendors, and our engineers learned the features of that equipment and were able to service it without waiting for the arrival of vendor’s experts from other countries. I believe that this move allowed the company to rise up to its present level and improve its competencies in line with current requirements. Of course, today, the competitors have caught up, and this “trick” would no longer work.
Please name the key qualities that make a company attractive for you.
When we talk about the attractiveness of the company, we have to understand who we have in mind. Among the five groups of beneficiaries that I previously mentioned, each has its own reasons and criteria to consider whether a company is attractive or not.
For clients, this includes one set of criteria; for suppliers and partners, another; for staff, something else; and for the state and owners, there would be a separate set of criteria. On the other hand, the more a company is attractive for these five groups, the more obnoxious it would look to competitors.
In the past, I would have gladly answered such questions, but now, I prefer to forward them to Dmitry Dyakonov, my business partner and Executive Director of InterPharmTechnology®, the flagship company of our Group.
Thank you very much, Mr. Paravyan, for this interesting and insightful conversation. Now, I would like to ask a few questions from your business partner.
Mr. Dyakonov, what would you add to the words of Mr. Paravyan about the company’s attractiveness?
The feedback provided by our counterparties since the establishment of the Group and the days when InterPharmTechnology® focused exclusively on the supply and maintenance of technological equipment indicates that the company stands out primarily by its open and honest relationships with both the customers and partners, including the equipment manufacturers.
We have an office in Moscow with a team of full-time highly qualified engineers. This allows us to provide prompt and high-quality service at minimal cost.
I would add to the comments of Mr. Paravyan that, over the past 20 years, the clients have greatly changed their approach to selecting the equipment. In the late 1990s and early 2000s, many novice manufacturers, who started with small batches of products made on the pilot equipment, selected such equipment mostly on the basis of “price and efficiency,” while the issues of documentation, validation, warranty and post-warranty service, personnel training were considered of secondary importance. Today, the situation is fundamentally different. Often, the negotiations begin by discussing the documentation because, today, almost no one is interested in the equipment that cannot be validated in accordance with the GMP requirements. However, this style of negotiations is possible only if the customer believes in advance that the vendor is offering high-quality equipment.
Today, great attention is paid to quality control systems directly integrated with the equipment (video control, weight control, etc.) Fortunately, new technology provides reliable high-speed systems at a reasonable cost.
Our company has a fairly strong reputation and competencies to be fully prepared for the new trends.
What is your policy for selecting the partners?
Mr. Paravyan defined the selection criteria and selected our key partners at the initial stage of business, when he headed the company before its transformation into InterPharmTechnology Group®. We continue to collaborate with most of them. Such companies as Axomatic, Flexicon, RP Sherer, IHolland, Countec, HoongA, Ki’s, Bonapace Srl. and others appeared in our list at that stage.
Of course, many things change over time. Currently, we expand and develop the range of our vendors based on the defined criteria. The main guidelines are the requirements for the quality of equipment, documentation and management of the manufacturer. We supply only the equipment that can be serviced by our specialists.
Therefore, we need to be ready before expanding the range of vendors. For us, the key process is continuous learning and improvement in the competencies of our service specialists. This is what allows us to provide prompt service.
We can see that South Korea holds important positions in the market of technological equipment for the pharmaceutical industry. How would you describe the quality, compliance with the standards of equipment and documentation, prices and capabilities of Korean equipment manufacturers?
This is a very broad topic. We have been among the first to supply Korean pharmaceutical equipment to the Russian market. A good example is such company as HoongA (blister & carton packaging lines). 40 years ago, the company manufactured HM-V series machines, which were basic models by today’s standards. This was a rather primitive machine driven by a single electric motor via central camshaft. Simplicity does not mean compromise on quality.
Today, HoongA product line includes HM900, a blister packaging machine with an output of up to 900 blisters per minute.
In this case, it’s all about technology rather than speed. There are only a few machines in the world that can deliver such speed! This was enabled by accumulated knowledge, highest precision in the manufacturing of spare parts, and use of the most advanced technical solutions, such as IPC and servo motors from B&R (Austria), a global leader.
HoongA was one of the first to propose the use of two blister inspection cameras which, in addition to traditional blister cell filling control and tablet inspection on the one side, allowed ensuring 100% control of the tablet by inspecting it from both sides.
Shift Feeder, the latest tablet feeding system, once and for all solved the issue of feeding and inserting even the most complex forms of tablets in the blister cells. The history of our relations with Korean manufacturers goes back more than 15 years, and we constantly see innovations.
The brands that you represent include IHolland, a leading global manufacturer of tablet press tools. Please tell us more about this relationship. Why IHolland? Today, there are many other competitive vendors offering similar products at significantly lower prices.
Our relationship with IHolland (UK) began in 2004. By that time, we felt strong enough to play in the “top” league and looked for a partner with a worldwide reputation and significant share of the global market. We were moving towards each other from opposite directions, as IHolland also wanted to find a Russian distributor with appropriate intellectual and technical expertise, rather than just a sales agent.
We chose IHolland because, unlike many other manufacturers of tablet press tools, IHolland offered much more than just dies and punches. It provided solutions for complex cases through selection of special steels and coatings based on the close cooperation with the University of Nottingham.
IHolland also has the technical base to offer optimal design of tablets, logos, breaklines, beveled edges, etc. In line with the current trends, IHolland offers the latest system of press tool management (TCM). The first hardware and software systems have been already delivered to Russia and successfully put into operation.
This material was published in the autumn 2018 issue of “GMP News” Russian-language magazine.
The magazine can be viewed in its entirety by clicking the following link: https://gmp-publication.ru/novosti-gmp-osen-2018/