$ 5.1 bn trade: KSA remains Gulf’s largest pharma market

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Updated 02 April 2013
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$ 5.1 bn trade: KSA remains Gulf’s largest pharma market

Saudi Arabia is expected to maintain its position as the largest pharmaceutical market in the Gulf, according to a report. The UAE is the second largest.
The GCC Pharmaceutical Industry report released by Alpen Capital said the GCC pharmaceutical market size was estimated at $ 8.5 billion in 2012, compared to $ 7.7 billion in the previous year. Saudi Arabia is the largest pharmaceutical market in the GCC totally valued at $ 5.1 billion, primarily on account of its large consumer base. The per capita sales in the year amounted to $ 175.
The total value of the UAE pharmaceutical industry was estimated at $ 1.6 billion in 2012, having grown by close to 3 percent from $ 1.5 billion in 2011.
The Saudi market thrives on provision of free medical and health care services by the government to its citizens. Around 35 percent of the pharmaceuticals available for sale are purchased by the government. However, compulsory health insurance for expatriates, who reside in the Kingdom in large numbers, and the healthy personal income of locals mean that the private sector’s contribution and out-of-pocket expenditure is also high.
Pharmaceutical expenses of expatriates are covered under insurance policies maintained by their employers, while locals are not reluctant to purchase expensive medication even if they have to directly bear the costs.
The GCC Pharmaceutical Industry report released by Alpen Capital says that the pharmaceutical sector has witnessed considerable progress over the years.
“The industry is expected to experience sustainable growth in the medium to long term. Increased domestic production, foreign investments, and consumption of generics are likely to support the market’s evolution,” said Sameena Ahmad, managing director of Alpen Capital.
According to the report, the sedentary lifestyles and increasing life expectancy have led to spread of chronic ailments thus resulting in increased drug consumption.
High levels of urbanization and a strong expatriate presence also support pharmaceutical sales growth in the region. Growing income levels and the resultant higher spending power of people have improved the quality of life and their overall ability to spend on medicines. General health awareness among the residents has also increased.
The report also says that the GCC population is anticipated to touch 50 million by 2017, which will again increase the sale of medicines.
Saudi Arabia has the largest manufacturing segment in the Gulf. However, most of the local production is destined for the export markets. Domestic production accounts for around 15 percent of the overall supply of pharmaceuticals in the market.
There are around 15-20 pharmaceutical manufacturers operating in the Kingdom, including indigenous companies and subsidiaries of multinational pharmaceutical giants.
Retail sales of pharmaceuticals through close to 4,000 pharmacies constitute 88 percent of the total market in Saudi Arabia.


Saudi Arabia flat, Drake and Scull International lifts Dubai

Updated 11 min 26 sec ago
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Saudi Arabia flat, Drake and Scull International lifts Dubai

  • The Saudi index was little changed, while the Dubai index closed up 0.2 percent
  • Shares in Saudi oil and gas and petrochemical companies were mostly down

DUBAI: Gulf stock markets were mostly flat on Sunday amid low trading volumes and a lack of significant events.
The Saudi index was little changed, while the Dubai index closed up 0.2 percent. The rest of the region closed down, but with losses limited.
Global stocks dipped last Friday because of persistent concerns over trade tensions. Oil prices also slipped on Friday, with Brent crude futures falling 79 cents, or 1 percent, to settle at $78.51 a barrel. But the dip came after a sixth week of gains, with prices breaking through $80 a barrel last week for the first time since November 2014.
Shares in Saudi oil and gas and petrochemical companies were mostly down on Sunday, despite some gains earlier in the day. Blue-chip Saudi Basic Industries (SABIC) shed 0.2 percent, while Saudi Kayan Petrochemical edged down 0.1 percent.
Most of the trading was concentrated on real estate developer Dar Al Arkan Real Estate Development Co., which was up 0.4 percent, and Alinma Bank, down 0.1 percent.
Real estate developer Jabal Omar Development was among the best performers, up 3.9 percent at the close – and it had been up more than 6 percent in earlier trading – after announcing an agreement with Albilad Capital to sell 90 housing units for 1.1 billion riyals ($293 million).
In Dubai, the index was lifted by gains of 2 percent and 1.7 percent by Dubai Financial Market and building contractor Drake and Scull International, respectively.
Drake and Scull International, by far the most traded stock in the market, reported last week a net profit attributable to shareholders of 16.2 million dirhams ($4.4 million) for the first quarter, swinging from a net loss of 722.5 million dirhams in the corresponding period last year.
Heavyweight Emaar Properties climbed 0.2 percent after a weak start earlier on Sunday.
The Abu Dhabi index edged down 0.1 percent, pressured by Sharjah Cement and Industrial Development Company, which lost 4.8 percent and was the most traded stock.
The Egyptian index lost 0.6 percent, but the most traded stock was Orascom Telecom Media & Technology Holding , which gained 2.4 percent.