Galderma recently debuted as the world’s largest independent dermatology company after separation from Nestlé.
However, some observers questioned Galderma Korea’s prospects as a private equity fund became the new owner of Galderma. The Korean unit has been suffering a deteriorating labor-management conflict because of the recent restructuring.
Korea Biomedical Review met with Rene Wipperich, general manager of Galderma Korea, to hear about Galderma’s independence from Nestlé, the company’s stance on labor issues, and its strategy in the Korean market.
|Galderma Korea General Manager Rene Wipperich speaks in an interview with Korea Biomedical Review.|
Question: Can you briefly introduce Galderma and Galderma Korea?
Answer: Galderma was established in 1981 and has been concentrating only on dermatology. In 1998, the company set up its direct branch Galderma Korea, which celebrates the 21st anniversary this year.
Galderma Korea also specializes in dermatology. It was the first company to sell prescription medicines in dermatology. Now, the company’s business segments include Pharmaceutical Business Division, Medical Solution Division including Esthetic, and Consumer Solution Division.
Q: One year has passed since you took the helm of Galderma Korea. Can you share the company’s achievements and potential for growth in Korea?
A: Korea is a very interesting and sophisticated market, and I think Seoul is a city that is leading the trends all over the world beyond Asia. As companies such as Samsung and Hyundai are well known internationally, Korea is regarded as a country with superior technology. For Galderma, however, Korea is like a “lighthouse” in Asia in dermatology, cosmetics, aesthetics, medical devices, and prescription drugs. There are already leading Korean companies in dermatology, and multinational companies are also actively engaging. For the past year, we have been aiming to become a competitive “key player” in the Korean market.
Our first strategy was narrowing down priorities and focusing on them. The Consumer Solution Division concentrated on how we should contact with customers through digital channels. We used state-of-the-art technologies in e-commerce to reach consumers and tried to make the most of our core sales channels. We also focused on using major digital channels such as Instagram, YouTube, Naver, and Kakao.
The Medical Solution Division focused on medical education related to acne, injections and filler franchises. Because doctors prescribe most of the Medical Solutions Division's products, we have tried to provide them with information about Galderma Korea's product portfolio and in-depth knowledge of dermatology. For example, we held a symposium for more than 400 dermatologists across the country from June 29 to Sept. 1. I think the event was the largest medical education in the field of dermatology. In November, we plan to hold a large symposium for physicians in Asia, including Korea, in the field of esthetics, inviting officials from Galderma headquarters and foreign speakers.
Our second strategy was pursuing a continuous “innovation” for growth. Galderma Korea released three products consecutively this year – Cetaphil Body Wash in July, acne treatment Epiduoforte and Cetaphil Cleanser in September. This was unprecedented for Galderma Korea.
Q: Galderma was separated from Nestlé on Oct. 2 and became an independent firm. Why?
A: Galderma was formed in 1981 as a joint venture between Nestlé and L'Oréal. Nestlé acquired L'Oréal’s stake in 2014. Nestlé determined that Galderma had great potential as a dermatology company. However, as Nestlé was a food and beverage company, it believed that the separation of Galderma, a pharmaceutical firm, would lead to faster and more effective growth.
Q: What changes will Galderma’s independence bring about?
A: Galderma’s business direction will remain unchanged, and the company will continue to grow with the new owner. We will focus on innovation that is meaningful to consumers, physicians, and patients. For this, we will provide the best medical education, reach consumers, and build a strong corporate culture internally. Galderma Korea will do its best to become a first-mover in medical solution and consumer solution in the Korean market.
Q: Galderma’s new owner is a private equity firm. In Korea, the term private equity (PE) has a negative connotation -- Korean people tend to think that PE firm is a raider that is more interested in short-term profit-taking through buying a failing firm and reselling it than helping a company grow in the long-term. How is the new owner drawing the picture of Galderma?
A: Our new owner EQT is a Swedish PE fund. EQT is interested in a long-term sustainable business model. The company is known for driving the growth of target firms to the next level of growth. If we look at EQT's investment cases over the last 10 to 15 years, the company has increased the value of companies by helping them increase sales and employment. This can be seen on the publicly available EQT website. We expect EQT to create added value by driving higher growth, more sales and sustainable business development for Galderma.
Q: EQT said it would increase Galderma’s sales and employment, but wasn’t Galderma Korea having a conflict with the labor union because of the layoffs of executives and employees of the sales department?
A: Galderma Korea has long delayed the changes necessary for sustainable growth. For this reason, we had to push for a radical change instead of a gradual change over the long term. Galderma Korea recently pushed for restructuring as part of its “Rebalancing & Refocusing” strategy. Since there has been no restructuring in the last several years, it was inevitable that we made many human resources adjustments. However, it was an unavoidable choice to compete with strong Korean rivals and various multinationals in the competitive Korean market.
The company has looked for ways on how employees could work efficiently. We particularly care about the burden on salespersons. The company is making efforts to help them create added value rather than do paperwork and administrative work.
There will no radical change from now. I think Galderma Korea already has a structure for sustainable growth. Unlike recent news reports, Galderma Korea fully supports employees’ freedom of forming of the labor union and maintains active communication with the union. Since the union was formed at the end of March, we had a mutual agreement on the ground rules in July and August. Now, we are holding regular meetings with the union two to four times a month. In the collective bargaining with the union, we submitted the first replies to 145 questions on more than 40 pages. We responded with the company's proposal to the additional questions by the union two or three weeks ago.
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