Value Drugs currently manufactures small quantities of it’s stomach-relief medication for a few local discount stores.  The company intends to expand it’s manufacturing capacity for stomach-relief drugs, and will begin producing a line of cough syrups.

The company acquired it’s existing base of retail customers through industry contacts.  The founder met the vice president for acquisitions of a local discount chain store at a social gathering, and he urged Joe Formulary to go into business.  This individual also provided Joe Formulary with the names of several purchasing agents for independent area supermarkets and drug stores.  Many of these individuals expressed a desire to do business with a regional discount manufacturer, giving Joe Formulary the impetus to start a pharmaceutical manufacturing operation.

The results from the introduction of the company’s lone product has been overwhelming, with Value Drugs unable to meet the local consumer demand for discount stomach-relief medication.  Orders for stomach-relief medication exceeded capacity within the first month of operations. 

The company’s sales have increased fairly consistently over the last two calendar years, with some seasonal fluctuation.  Peak sales for the stomach-relief product are realized during the summer months.  However, the company anticipates greater fluctuation in it’s cough syrup sales.  Winter months typically produce the largest sales volume for this product, and summer the lowest.  Nonetheless, the product mix has been chosen, in part, to maintain revenues throughout each respective seasonal variation.

Based on the demand for the current stomach-relief product and strong interest in a similar cough syrup medicine (which Value Drugs does not currently produce), the time is ripe for expansion.  Given the company’s ability to expand it’s production capacity and add a second product (cough syrup), Joe Formulary expects gross sales to exceed $5 million in the first year of expansion.