Jordan’s Hikma Pharmaceuticals has set up a joint venture in Ethiopia as it continues its expansion into the drugs market in Africa.
Hikma has forged an alliance with MIDROC, a company run by billionaire businessman Sheikh Mohammed Hussein Al Amoudi, to create a 50:50 joint venture called HikmaCure that will start domestic production of pharmaceuticals in Ethiopia within the next five years.
Earlier this year Hikma forked out $22m to buy Egyptian Company for Pharmaceuticals & Chemical Industries (EPCI) in a deal that included two manufacturing facilities and 35 generic pharmaceutical products, but the new venture marks its first foray into sub-Saharan Africa.
Hikma has been on an acquisitive streak on the back of a buoyant financial performance, thanks in part to strong windfall sales of doxycycline, a cancer drug that has been in short supply for the last couple of years due to manufacturing quality issues affecting Ben Venue Laboratories, a key producer in the US.
The company’s chief executive Said Darwazah said Ethiopia and the sub-Saharan region “offers strong growth potential in the medium to long term”, adding that the company is also on the lookout for other opportunities to build its presence there.
Ethiopia has a population of 94 million people and while the pharma market is relatively small at around $500m it is growing at a rate of more than 15 per cent a year and should top $1bn by 2018, with most drugs imported.
HikmaCure plans to set up a local manufacturing plant by 2017, with Hikma and MIDROC each putting up to $22.3m into the project.
Analysts at Panmure Gordon said the move is consistent with Hikma’s strategy of expanding its geographical footprint in the Middle East and North Africa (MENA) markets, and provides “another low cost manufacturing opportunity for the group”.