SQUARE Pharmaceuticals Ltd. is the largest pharmaceuticals company in Bangladesh. The company was established in 1958 by Samson H. Chowdhury along with his three friends. At the beginning, the company was a private firm. In 1964 the company converted into a Private Limited Company. The company was converted into a public limited company in 1991 and listed with Dhaka Stock Exchange in 1995. It has been continuously in the 1st position among all national and multinational pharmaceuticals companies since 1985. According to their annual report (April 2014 – March 2015), the turnover of SQUARE Pharmaceuticals was BDT. 30.28 billion (US$ 385.22 million) with about 18.64% market share having a growth rate of about 25.36%.

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Assignment On
SQUARE Pharmaceuticals Ltd
Wholly owned subsidiary entry mode Africa Country
Kenya Markets

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Introduction
SQUARE Pharmaceuticals Ltd. is the largest pharmaceuticals company in Bangladesh. The
company was established in 1958 by Samson H. Chowdhury along with his three friends. At the
beginning, the company was a private firm. In 1964 the company converted into a Private Limited
Company. The company was converted into a public limited company in 1991 and listed with
Dhaka Stock Exchange in 1995. It has been continuously in the 1st
position among all national and
multinational pharmaceuticals companies since 1985. According to their annual report (April 2014
– March 2015), the turnover of SQUARE Pharmaceuticals was BDT. 30.28 billion (US$ 385.22
million) with about 18.64% market share having a growth rate of about 25.36%.
Chronology at a Glance
 1995: Chemical Division of SQUARE Pharmaceuticals Ltd. Starts production of Active
Pharmaceuticals Ingredients (API)
 1998: Agro-chemical & Veterinary Products division of SQUARE Pharmaceuticals starts
its operation.
 2001: US-FDA/UK-MCA standard new pharmaceuticals factory goes into operation built
under the supervision of Bovis Lend Lease, UK
 2004: SQUARE enlisted as UNICEF’s global supplier
 2005: New State-of-the-Art SQUARE Cephalosporins Ltd. Goes into operation; built
under the supervision of TELSTAR S.A. of Spain as per US-FDA/UK-MHRA
requirements.
 2007: SQUARE Pharmaceuticals Ltd., Dhaka Unit gets the UK-MHRA approval.

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 2009: Starts manufacturing of insulin maintaining quality standards of US-FDA & UK-
MHRA. Dedicated hormone & steroid products manufacturing facility complying with the
cGMP of WHO, US-FDA & UK-MHRA starts operation.
 2012: SQUARE Pharmaceuticals Ltd., Dhaka Unit and SQUARE Cephalosporins Ltd. Get
the Therapeutic Goods Administration (TGA) of Australia approval.
 2015: PAI (Pre-Approval Inspection) by US-FDA was successful for Dhaka Site’s solid
dosage unit. WHO approved SQUARE’s cGMP (Current Good Manufacturing Practice).
Engaged in International Trade
In 1974 SQUARE Pharmaceuticals went on Technological Collaboration licensing agreement with
Janssen Pharmaceuticals, Belgium, a subsidiary of Johnson & Johnson International, USA. They
were singed Licensing Agreement with F. Hoffman-La Roche & Co Ltd., Switzerland in 1982.
But after amendment of Bangladesh Drug Policy in 1982, the company discontinued their
agreement. Soon after discontinuation their agreement the company searched out for their avenues
to extend their business in abroad by exporting or joint venture or by some other ways. After a
pretty long time, they managed to get an international market by exporting their products in
Myanmar in 1987.
SQUARE Pharmaceuticals has been exporting antibiotics and other pharmaceutical products.
They have 700 products approvals for export market and 900 products approvals for local
(Bangladesh) market.
At present SQUARE Pharmaceuticals Ltd. is exporting their Pharmaceuticals products in 36
countries as follow:
Europe: UK, Denmark, Netherlands
Asia: Afghanistan, Myanmar, Bhutan, Cambodia, Fiji, Hong Kong, Iraq, Korea, Macau, Malaysia,
Maldives, Nepal, Papua New Guinea, Palau, Sri Lanka, Tajikistan, Philippines, Uzbekistan,
Vietnam.

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Africa: Eritrea, Ivory Coast, Kenya, Libya, Malawi, Mauritania, Mauritius, Mozambique, Nigeria,
Somalia, Tanzania, Uganda
Central & South America: Belize, Costa Rica, Suriname
Besides pharmaceuticals products, SQUARE Herbal & Nutraceuticals Ltd. (SHNL – a domestic
subsidiary of SQUARE Pharmaceuticals Ltd.), are also exporting their products to Hong Kong,
Uganda, Cambodia, Fiji, Vietnam, Canada and recently Georgia has been added in the exporting
country list.
Highlights of the Export Operation
 Exports pharmaceutical finished products
 Offers quality products at competitive price
 Offers more than 300 off-patent and on-patent molecules in different dosage forms
 Offers facilities for contract manufacturing
 Offers service for product development with subsequent technology transfer
 Provides assistance in product promotion and training in overseas markets
SWOT
Strengths of Square Weaknesses of Square
 Sufficient number of highly
experienced and skilled
employees
 Reputed company, and
recognized brands
 Large customer base
 Absence of Advanced
Technology
 Less Organized
 Time Consuming Decision
Making Process

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 Local source of raw materials
 Able to Create benchmark
 Strong Corporate Governance
 Greater Customer Loyalty
 Inefficient Debt-Asset
Management
 Minimal profit
Opportunities for Square Threats for Square
 Govt. Support
 Loan Offering from Prestigious
Banks
 Exporting abroad, entering
global market
 Possible new product units
 Larger Market share
 Number of competitors
 Volatile exchange rate
 Innovative products by others
 Acquisition and Merger
 Hiking price of raw materials
 Inadequate Power supply
The following SWOT analysis captures the main strengths and weaknesses within the
company and describes the opportunities and threats of the company.
Strengths

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Square Pharmaceuticals has highly experienced working team of which members are
internationally experienced. Also, mid-level managers are highly skilled and efficient. It is a very
reputed company as it has been providing medicine and related product quite a long time. Also, it
has created a very strong and large customer base. The resources they use are collected locally, so
it is very much available and inexpensive which give a door-way to cost efficiency.
Weakness
It does not use advanced technology in its manufacturing unit as it’s expensive and not yet
available in Bangladesh. Also, the internal and external operations are not organized enough. As a
Bangladeshi company, like others, it has bureaucratic decision making process. As a result,
the decision comes from the upper level which is very much time consuming. Square
Pharmaceuticals has inefficiency in asset management system. Lastly, as it offers its products at a
very cheap price, the profit margin is much lower than other pharmaceutical companies.
Opportunities
The government of Bangladesh has huge support for pharmaceuticals companies. As a result, the
company can gather capital easily from a different type of sources. So, expansion opportunity is
high. As Square is a reputed company and produce a quality product, it has huge opportunities to
go global. And locally, it has earned reputation. As a result, there is a chance of gaining more
market share in future. If it provides this type of product consistently, the competitors will not be
able to defeat this company.
Threats
Due to price hike of raw material, the production cost is going higher day by day. As it’s a local
company, it will not affect much, but for going global, it’s a big barrier in the sense of price.
Inadequate supply of electricity disrupts the production system. Private power system requires
more expenditure. For importing raw materials, or exporting its products, it depends on currency
exchange which is very volatile. It makes the profit margin uncertain. Lastly, the industry is a
growing one. So the competitors are growing in number day by day.
Description of entry mode
Firms can enter foreign markets through

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 exporting
 licensing or franchising to host country firms
 a joint venture with a host country firm
 a wholly owned subsidiary in the host country to serve that market
The advantages and disadvantages of each entry mode are determined by
 transport costs and trade barriers
 political and economic risks
 firm strategy
1.Exporting
Exporting is often the first method firms use to enter foreign market
Exporting is attractive because
 it is relatively low cost
 firms may achieve experience curve economies
Exporting is not attractive when
 lower-cost manufacturing locations exist
 transport costs are high
 tariff barriers are high
 foreign agents fail to in the exporter’s best interest
2. Turnkey projects
It involve a contractor that agrees to handle every detail of the project for a foreign client,
including the training of operating personnel
Turnkey projects are attractive because
 they allow firms to earn great economic returns from the know-how required to
assemble and run a technologically complex process
 they are less risky in countries where the political and economic environment is
such that a longer-term investment might expose the firm to unacceptable political
and/or economic risk
Turnkey projects are not attractive when

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 the firm's process technology is a source of competitive advantage
3. Licensing
It is an arrangement whereby a licensor grants the rights to intangible property to another entity
(the licensee) for a specified time period, and in return, the licensor receives a royalty fee from
the licensee
Licensing is attractive when
 the firm does not have to bear the development costs and risks associated with
opening a foreign market
 the firm avoids barriers to investment
 it allows a firm with intangible property that might have business applications, but
which doesn’t want to develop those applications itself, to capitalize on market
opportunities
Licensing is unattractive when
 the firm doesn’t have the tight control over manufacturing, marketing, and
strategy necessary to realize experience curve and location economies
 the firm’s ability to coordinate strategic moves across countries by using profits
earned in one country to support competitive attacks in another is compromised
4. Franchising
A form of licensing in which the franchisor sells intangible property and requires the franchisee
agree to abide by strict rules as to how it does business
Franchising is attractive because
 can avoid costs and risks of opening up a foreign market
Franchising is unattractive because
 it may inhibit the firm's ability to take profits out of one country to support
competitive attacks in another
 the geographic distance of the firm from its foreign franchisees can make poor
quality difficult for the franchisor to detect

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5. Joint ventures
It involve the establishment of a firm that is jointly owned by two or more otherwise independent
firms
Joint ventures are attractive because
 a firm can benefit from a local partner's knowledge of the host country's
competitive conditions, culture, language, political systems, and business
systems
 the costs and risks of opening a foreign market are shared with the partner
 they can help firms avoid the risk of nationalization or other adverse
government interference
Joint ventures can be unattractive because the firm risks giving control of its
technology to its partner
 the firm may not have the tight control over subsidiaries that it might
need to realize experience curve or location economies
 shared ownership can lead to conflicts and battles for control if goals
and objectives differ or change over time
6. Wholly owned subsidiaries
It involve 100 percent ownership of the stock of the subsidiary
Wholly owned subsidiaries are attractive because
 they reduce the risk of losing control over core competencies
 they gives the firm the tight control over operations in different
countries that is necessary for engaging in global strategic
coordination
 they may be required if a firm is trying to realize location and
experience curve economies
Wholly owned subsidiaries are unattractive because
 firms bear the full costs and risks of setting up overseas operations

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The Competitive Advantage of Square Pharmaceuticals Ltd.
SQUARE PHARMA is one of the leading companies in the pharmaceutical industry of the country
and could attain almost 15% of the local market. The strength of attaining such position in the
industry are:
Brand Leadership
As survey showed that 27 of SQUARE PHARMA’s products are found to be brand leaders out of
47 products surveyed while 10 stand at second place.
Market Recognition
Beximco has secured market recognition in the market through innovative marketing strategies
and aggressive product promotion. The company’s strong support to the medical community has
gained its brand loyalty from the doctors.
Market Growth
The market is expected to grow by 15 to 20% per annum for the next 5 years. The compounded
annual growth for the previous 6 years was 15%. The next stage of growth is expected to come
from backward integration to manufacture high volume raw materials, introduction of Hi-Tech
manufacturing process that are difficult to imitate products, and exports.
Aggressive Diversification
SQUARE PHARMA is keen to diversify its capacity of produce and market. Strong export demand
and international product registration have led SQUARE PHARMA to embark on a massive
capacity expansion as evident in expansion of plant and establishment of new plant in compliance
with FDA (Federal Drug Association) quality mark .
Recently SQUARE PHARMA signed a new contract for loan of about 1100 million BDT for its
FDA (Federal drug Administration) compliant plant that costs over BDT 3,000 million BDT.
Basic Chemicals and Multipurpose Chemical Plant
Currently bulk antibiotics amoxycillin, ampicillin, and cloxacillin are being produced with an
installed capacity of 35 tons per month. It is going to introduced Cephalexin and Cephradine very
soon; like-wise in its multi purpose unit, production of Amlodipine, Fluconazole, Clotrimazole,
Cetirizine Hcl, Tramadol, and Riboflavin 5-phosphate sodium.

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Opportunities
There are some of the sectors where SQUARE PHARMA has not entered but that possess ample
opportunities. One of such sector is SVP or small volume Parenteral that is known as injections in
the market. Due to having the quality attainment capability as evident in producing IV products,
expertise and resource SQUARE PHARMA should immediately think of this product and decide
upon having the feasibility study.
International market is also another very lucrative sector for SQUARE PHARMA. In the world
market the low cost of product is an important upper hand for SQUARE PHARMA to market its
product. The new FDA compliant plant will assist SQUARE PHARMA to confirm the world
market about the quality of its products.
The Competitive disadvantage of Square Pharmaceuticals Ltd.
Cash flow management The challenge
Cash flow is essential to small business survival, yet many entrepreneurs struggle to pay the bills
(let alone themselves) while they’re waiting for checks to arrive. Part of the problem stems from
delayed invoicing, which is common in the entrepreneurial world. You perform a job, send an
invoice, then get paid (hopefully) 30 days later. In the meantime, you have to pay everything from
your employees or contractors to your mortgage to your grocery bill. Waiting to get paid can make
it difficult to get by – and when a customer doesn’t pay, you can risk everything.
Hiring employees
The challenge: Do you know who dreads job interviews the most? It’s not prospective candidates
– it’s entrepreneurs. The hiring process can take several days of your time: reviewing resumes,
sitting through interviews, sifting through so many unqualified candidates to find the diamonds in
the rough. Then, you only hope you can offer an attractive package to get the best people on board
and retain them long-term.

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Time management
The challenge: Time management might be the biggest problem faced by entrepreneurs, who wear
many (and all) hats. If you only had more time, you could accomplish so much more!
Delegating tasks
The challenge: You know you need to delegate or outsource tasks, but it seems every time you do
something gets messed up and you have to redo it anyway.
Marketing strategy
The challenge: You don’t know the best way to market your products and services: print, online,
mobile, advertising, etc. You want to maximize your return on investment with efficient, targeted
marketing that gets results.
Capital
The challenge: You want to start or grow your business, but you have little capital to do it with.
Strapped budget
The challenge: Even though cash flow is fine, it seems you never have enough in your budget to
market your company to its full potential.
Self-doubt
The challenge: An Company ’s life is not enviable, at least in the beginning. It’s extremely easy to
get discouraged when something goes wrong or when you’re not growing as fast as you’d like.
Self-doubt creeps in, and you feel like giving up.

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Why SQARE Exporting their Products?
Exporting is the best method for SQUARE to enter foreign market. Some reason is given below.
Exporting is good for SQUARE because
 It is relatively low cost for SQUARE.
 firms may achieve experience curve economies
 SQUARE could significantly expand their markets, leaving less dependent on any single
one.
 Greater production of SQUARE can lead to larger economies of scale and better margins.
The research and development budget could work harder as they can change existing products to
suit new markets for SQUARE
Wholly owned subsidiary entry mode Africa Country Kenya Markets
Square Pharmaceuticals Kenya EPZ Ltd, a 100 per cent subsidiary of Square Pharmaceuticals Ltd (SPL),
Bangladesh, started the construction work of its state-of-the-art pharmaceutical manufacturing
plant through a groundbreaking ceremony in Nairobi, Kenya.
"This is a benchmark achievement for the Bangladesh pharmaceutical industry as Square
pharmaceuticals Limited will be the 1st Bangladeshi pharmaceutical manufacturer to build its own
plant outside Bangladesh", said a statement.
The Cabinet Secretary of the Ministry of Industry, Trade and Cooperatives - Mr. Adan Mohamed,
the High Commissioner of Bangladesh to Kenya Maj. Gen. Abul Kalam Mohammad Humayun
Kabir and the Managing Director of Square Pharmaceuticals Mr. Tapan Chowdhury joined with
other dignitaries from Kenya EPZ, World Bank, IFC, Standard Chartered Bank to celebrate the
groundbreaking ceremony of "Square Pharmaceuticals Kenya EPZ Ltd".

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SPL is operating in pharmaceutical industry for last 60 years with manufacturing knowledge of all
possible dosage forms of medicines, and the company is exporting pharmaceuticals products to 42
countries including Asia, Africa, Europe and America.
Exporting: It started export to Kenya in 2005 and has registration of 117 products with Pharmacy
& Poison Board, Kenya - the drug regulatory agency of Kenya.
Kenyan local manufacturers have the capacity to supply only 30 per cent of total demand of the
Country. 70 per cent of their need still depends on import. Square Pharmaceuticals Kenya EPZ
Limited comes with world class technology of pharmaceuticals manufacturing, quality control and
state-of-the-art machineries in Kenya to fill the unmet demand of medicines in EAC market
(Kenya, Tanzania, Rwanda, Burundi, Uganda and South Sudan). The company prefers to build the
facility in Kenya identifying it as the most preferred place for doing business in the region.
Company's investment in the sector will be US$ 25 million at the first phase.
This investment shall facilitate Bangladesh to earn more foreign exchange through export of
finished pharmaceuticals, semi-finished pharmaceuticals, API and other raw materials of
pharmaceuticals industry, skilled manpower. It shall open new window of revenue as dividend,
royalty and selling of tech knowhow from Bangladesh.
The manufacturing plant will be capable of manufacturing 2 billion tablets and capsules and 60
million bottles of liquid formulations. Products of the plant will be WHO pre-qualified and will
supply throughout the Africa in long run.
Competitive advantage First Mover : Square Pharmaceutical Ltd. is first mover competitive
market place in kenya . Because Square Pharmaceutical ltd. Started the construction work of its
state-of-the-art pharmaceutical manufacturing plant through a groundbreaking ceremony in
Nairobi, Kenya. The African market place medicine demand 70 percent exporting in Asian
country’s Pharmaceutical company . Kenya market place SPL established factor manufacturing
low cost price medicine selling and African country easily exporting medicine. So easily African
other country maintain pharmaceutical products .SPL similar company not investment in Kenya
mark place in present time . The Kenya pharmaceutical market leading SPL company . SPL 300
more medicine manufacturing . Diabetes Disease Patients medicine Analogue Insulin demand in
kenya 100 percent exporting . So SPL Larsulin™ Analogue Insulin easily market place selling

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and kenya SPL factor manufacturing the Larsulin™ Analogue Insulin low price products .African
other country easily demand maintain . SPL Larsulin™ Analogue Insulin similar medicine price
high but SPL selling lower rate in market.
Hurdles in Exporting Their Products
At the beginning SQUARE Pharmaceuticals have to face some hurdles to export their products in
foreign countries. According to US-FDA, MCA, and cGMPrequirements they didn’t have proper
infrastructure. Therefore partners/importers were unwilling to export their products. So, they have
to develop their factory infrastructure.
They had to face scarcity of gas, electricity, Q/C (quality control) instruments, new production,
new machineries etc. in our country.
Earlier in our country there was lack of skilled manpower in pharmaceuticals industry for
maintaining quality products. Therefore SQUARE Pharmaceuticals have to train their manpower
which results they have to face extra cost. Also they have to improve Documentation Preparation.
Although they have approval from US-FDA, UK-MHRA and TGA- Australia but still they have
to fulfill exporting countries own standards requirements which sometimes hinder their activities.
Another problem is that they have to face that most of the countries impose high registration cost
and still they are also facing this problem; for instance- they are trying to export their product to
Russia but registration cost is about US$22,000 dollars for export of a single product. So it is very
difficult to finance such a big amount for registration. Registration from Pakistan is very tough as
they restricted import of Bangladeshi pharmaceuticals by law to that country.
They are facing the problem with commercial sample which is free of cost. If their partners regret
their sample they have to send again their sample which extra cost for them. And another problem
is that according to our banking regulation every company (Pharmaceutical Industry)is allowed to
send maximum US$100000 equivalent sample in each year. But they are dealing their business
with millions of dollars so it is very lowest amount. Again if a partner regrets their sample they
have to send them sample again but due to banking regulation they can’t send their sample to their
partner which is big problem for them.

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Release order and authorization of ministry of health for each consignment of export, marketing
difficulties, and lengthy procedures of issuing L/C are problems for them. These cause results in
discontinuity of export, reduction of scopes, delay in shipment and extra cost for them.
Methods of Market Testing
They don’t take help of any survey agency/organization for market testing. They have own partner
in overseas, they (partner) conduct the market test on their own accord. At first they used to send
their product sample (Free of cost) to their target market countries like South Asian neighboring
countries. Where regulatory norms are somewhat relaxed they tried to enter to those countries and
later on in other countries by using reference of those countries. In some cases they collect
information form newspapers and different articles about product demand that are they willing to
export. They also used to open an office and send their agents to study the product demand/create
demand for their product.
Opportunities for Other International Trade Methods
Though we don’t fall under developed countries and our pharmaceuticals products reputation is
not very high compare to other pharmaceuticals company in overseas and we don’t have research
labs for searching new molecules that’s why foreign companies are not much interested in go for
joint venture or merger with Bangladeshi Pharmaceuticals Company. So, they can’t engage in joint
venture or merger.
On the other hand licensing policy is not applicable in Bangladesh as per government rules and
regulation for which they can’t go for licensing business.
In opening a new subsidiary in a foreign market requires a big amount of capital and due to banking
regulation of maximum investment in an overseas market in our country it is difficult to go for
open a new subsidiary in foreign market. For these reasons they are basically engaged in exporting
business.
Conclusion/ *Recommendation

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SQUARE Pharmaceuticals Ltd. is leading pharmaceutical company in Bangladesh. Day by day
they are increasing the number of their exporting country. Due to rules and regulation in foreign
country, undeveloped infrastructure, banking and government rules in Bangladesh, lack of
research lab, they can’t go for other international modes like- joint venture, merger, new
subsidiary, licensing. We hope that Bangladesh government will take proper action to facilitate the
opportunity for pharmaceuticals industry in Bangladesh.
Recommendation
1. Quality and control: According to international standard square pharmaceuticals ltd. should
maintain their product quality.
2. Local market share: At present in Bangladesh square pharmaceuticals is the market leader in
pharmaceutical sector. Its followers and competitors always try to increase their percentage of
market share. So square pharma concentrate more to increase his market share.
3. Foreign market: Though SPL captured Asia, Africa, Middle East pharmaceutical market but the
Europe market till now un-captured. So square pharma should concentrate more in Europe market.

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4. Inventory management: According to the ratio their inventory management system is struggling
they should give this situation topmost priority.
5. Staff training: Though SPL is a leading company but its maximum staffs are not well trained.
So company should arrange training program.
*Bibliography/ Reference
List of Abbreviations
cGMP – Current Good Manufacturing Practice
MCA – Medicines Control Agency
MHRA – Medicines and Healthcare Products Regulatory Agency (UK)
US-FDA – Food & Drug Administration, United States
TGA – Therapeutic Goods Agency, Australia
L/C – Letter Of Credit
DA – Documents against Acceptance

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DP – Documents against Payment
PAI - Pre-Approval Inspection
Appendix
Q1. What are the steps you had to take for exporting your products?
Q2. Do you have distribution office in exporting country?
Q3. Do you have any agents in exporting country?
Q4. Do you have to face regulatory requirements by the exporting country/government?
Q5. How do you handle those requirements?
Q6. How do you make your payment system?
Q7. How do you proceed market testing process in exporting country?

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Q8. What are the hurdles you faced when you start your export at the beginning?
Q9. What are the hurdles you are facing now by exporting your products?
Q10. Are you willing to engage in other international methods to go for international market?
Q11. What are the problems for which you can’t go for other international methods?
Q12. After how many years you engaged in international trade?

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References
We made face to face interview with two persons to collect our information for preparing the
report. At first we made an interview with Mr. Golam Robbani, former Director of SQUARE
Pharmaceuticals Ltd. Then we made another interview with Mr. Abu Bakar Siddique, Manager of
Global Regulatory Affairs and International Marketing department of SQUARE Pharmaceuticals
Ltd. We also took help of different websites also to collect information. Websites addresses are
as follows:
http://bdnews24.com/bangladesh/2005/04/06/non-tariff-barriers-hassling-exporters1
http://www.squarepharma.com.bd/
https://en.wikipedia.org/wiki/Square_Pharmaceuticals