Media-shy and reserved, Erik Bogsch, CEO of Hungarian pharmaceutical manufacturer Richter Gedeon, is known for his old-fashioned manners. "He is a gentleman with a capital G," says Katalin Dani, a senior analyst for CAIB Securities in Budapest. It's not his manners, however, but his skill as a turnaround artist that has won him respect in Eastern Europe. "My job is to deliver, not to put ideas into the air," he says.
Deliver he has. Bogsch, 55, took over Richter Gedeon when it was a heavily indebted state-owned dinosaur in 1992. He took the job after running Richter's trading unit in London, where he learned valuable business lessons. Immediately, he cut the workforce of 6,000 by a quarter and slashed management by half. He unloaded noncore divisions--for instance, selling the cosmetics arm to Colgate-Palmolive Co.--and shutting those he could not sell. The company then focused on its most profitable product lines, such as gynecological and cardiovascular medicines. While most sales are generics, which Richter can produce more cheaply than Western competitors, its 600-strong research unit also continues to develop new drugs. Under Bogsch's stewardship, Richter Gedeon began turning a profit in 1993, and since then earnings have risen by an average of 20% a year, reaching $86.5 million in 2001, on $309.6 million in sales. Richter's biggest customer is Russia, but Bogsch is carving out a niche in Europe and the U.S., particularly with hormone replacement therapies. Sales in the U.S. have tripled in the past three years, to $30 million.
Born in the Hungarian capital, Bogsch was trained as a chemist and economist at Budapest Technical University. Bored by the lab, he found a job after graduation at Richter as "what you would call a project manager today," he says. That led to a job running Richter's Mexico unit when he was only 30. His management experience, science background, and knowledge of Spanish got him the job, he says, adding quickly: "I was never a member of the Communist Party."
Apart from working long hours, Bogsch likes to play tennis. "I'm at my best when I'm down 5-2," he says. No surprise there. He is, after all, proven at turnarounds.
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Copyright 2002, Bloomberg L.P.
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