Pfizer, a major player in the global pharmaceutical industry, has announced that it will soon begin construction work on a new manufacturing plant in Saudi Arabia.
Foundation stone for the new facility has been laid in King Abdullah Economic City (KAEC). The 32,000 square meter plant will be built at the Industrial Valley, on the west coast of the Red Sea, north of Jeddah and is expected to be operational by 2015 . The plant will feature solid dose manufacturing, packaging and warehousing facilities. With a total production capacity of 18 million packs per year, the facility will be able to supply the Saudi Arabian market with a broad range of its products.
Commenting on the development, Abdulatif Bin Ahmed Al Othman, governor of the Saudi Arabian General Investment Authority (SAGIA), said that, “we are sending a very strong and positive message to the world – that Saudi Arabia is set to transform the economy and its infrastructure to host and support knowledge-based industry leaders and manufactures like Pfizer.”
The Saudi Arabian General Investment Authority (SAGIA) believes that by choosing the Kingdom over other GCC states for construction of its manufacturing plant, Pfizer has demonstrated faith in the government’s investment policies. In recent years, the government has undertaken several measures to develop a strong manufacturing base and promote the service sector in a bid to reduce its reliance on income earned through oil exports.
Pfizer’s decision to build a new manufacturing facility in Saudi Arabia has been driven by the consistent increase in the demand for medicines in the country. In recent years, the country has witnessed a dramatic shift in the disease profile of its citizens, with a high increase in lifestyle-induced diseases. The healthcare needs in Saudi market have grown due to high prevalence of diabetes and cardiovascular diseases.
Saudi Pharma Market: A Plethora of Opportunities
The Economist Intelligence Unit (EIU) forecasts that the MENA markets will represent a combined GDP of US$2.5 trillion in 2016, led by Turkey and Saudi Arabia. The Saudi pharmaceutical market is the richest in the Gulf region and is expected to rise by a CAGR in the high single digits during the 2011-2016 period, according to Economic Intelligence Unit report. Due to low domestic pharmaceutical production in Saudi Arabia, the vast majority of the market is provided by imports.
According to a report by Global Insight in 2010, only about 2% of global pharmaceutical sales were in the Middle East and North Africa. Despite tougher regulatory and investment climates, the higher than global average population growth in the region is making it attractive for global pharma companies to enter the market which otherwise is dominated by local generic pharma companies. Approximately 85% of the drugs sold in Saudi Arabia is imported.