JEDDAH, 16 March 2005 — Plans are under way to establish a major pharmaceutical factory in Jeddah at a cost of SR600 million to meet the growing demand for medicine in the country.
Abdul Khaleq Saeed, a prominent businessman in the city, said his group was holding negotiations with Indian officials and investors to establish the factory.
“We will discuss all aspects with the Indian side to establish the factory either by the participation of Indian investors or by transferring Indian technology,” he said.
Saeed described the new factory as one of the largest investment projects in the Kingdom, especially in the pharmaceutical sector. At present there are eight pharmaceutical factories in various parts of the country. He said there is growing demand for medicine as a result of population growth and because of the presence of a large number of expatriates. The Saudi pharmaceutical market is estimated at SR3.75 billion.
“The foreign investment law allows Saudi businessmen to enter into deals with international companies having vast experience to establish vital projects,” he told Al-Eqtisadiah business daily, a sister publication of Arab News.
According to Abdul Hafiz Jan, assistant director of medical and pharmaceutical licensing department at the Health Ministry, of the eight pharmaceutical factories four are in Jeddah.There are two factories — Pharma and Al-Jazeera — in Riyadh. The remaining two are in Qasim and the Eastern Province. Jan said his department would soon license some more factories. But he did not say where they would be established.
Suresh Punetha, CEO of National Pharmaceutical Industries (NPI), Oman, estimated the consumption of pharmaceutical products within the Arab market at around $6 billion, out of which the Gulf Cooperation Council (GCC) region accounts for $1.6 billion.
“Saudi Arabia has a (private sector) market size of around $1 billion, followed by the United Arab Emirates (UAE) at $350 million, Kuwait $160 million, Qatar $80 million, Oman $60 million, and Bahrain $30 million,” Oman Economic Review quoted Punetha as saying.
Saudi Arabia has the largest number of generic brand manufactures such as Spimaco, Tabuk, Al-Jazeera, Dar Al-Dawa, and Riyad Pharma.
Other producers in the Gulf are Julphar of the UAE, Kepisco of Kuwait, and National Pharmaceutical Industries of Oman. So far, Qatar and Bahrain do not boast of any significant manufacturing facilities.
Also, new manufacturers each are expected to venture into UAE and Oman respectively. Julphar is planning to put up another unit within UAE and is one Gulf company that has been performing consistently well.
The company, in all has five plants - three in UAE, one in Germany, and one in Ecuador. In UAE, a new $14 million plant has been built in the form of a joint venture, and in Oman another manufacturing unit called the Oman Pharmaceutical Products Company is in the offing at the Raysut Industrial Estate in Salalah.
In addition, one more pharmaceutical plant is expected at Nizwa, where already a formulation unit named Nizwa Pharmaceutical Industry exists. There are now more than 200 pharmaceutical companies in the Arab world.