Jordanian drugmaker Hikma Pharmaceuticals has linked up with billionaire businessman Sheikh Mohammed Hussein Al Amoudi to set up a joint venture in Ethiopia.
London Stock Exchange-listed Hikma and the sheikh’s MIDROC group say the 50/50 JV, to be called HikmaCure, will establish an Ethiopian operating company, build a local manufacturing facility and begin marketing and distributing pharmaceuticals in the country over the next five years. The partners will each put in up to $22.3 million to the JV.
Ethiopia has a population of 94 million people, 64% of whom are under 25. The pharmaceutical market there is valued at over $500 million and is growing at an annual rate of around 15%.
Hikma noted that it should reach $1 billion in 2018, driven by “increasing investment in healthcare infrastructure and improved purchasing power of patients”. Currently, imports account for around 75% of the total pharmaceutical market.
Hikma chief executive Said Darwazah said that “expanding our presence into sub-Saharan Africa is a key strategic priority…and this is an excellent first step”. Noting that the company is on the look-out for other opportunities in the region, he added that Ethiopia “offers strong growth potential in the medium to long term and our investment at this stage will enable us to be well positioned in the market”.
Commenting on the news, Savvas Neophytou, an analyst at Panmure Gordon, said Hikma’s entry into Ethiopia is not expected to be transformative but remains consistent with management strategy of expanding its geographical footprint in in the Middle East and North Africa region. He added that the company “has managed to enter this small but fast-growing market with a small investment”.