Friday, Sep 22, 2017
Industry & Trade | Africa | Algeria

SAIDAL's success highlights potential of Algerian pharma sector


5 years ago

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Based in Algiers, Groupe SAIDAL is the largest pharmaceuticals group in the country and ranks among the biggest in Africa

Over the past decade or so, since the end of the civil war and the beginnings of more peaceful times for the country, the Algerian government has put a lot of its effort into the healthcare sector. Showing its commitment to the improvement of the population’s health, the government has outlined a comprehensive program through to 2025 that includes, among many other things, raising the number of hospital beds and physicians in Algeria and increasing the amount of pharmaceuticals produced in the country.
This healthcare plan will provide substantial opportunities to foreign investors, most of whom operate in the country through imports or local partnerships. At present the Algerian pharmaceutical industry is wide open to potential investors. Pharmaceuticals currently account for 0.008% of all exports but 4.5% of all imports. Algeria's import substitution legislation means drugs that can be manufactured in the country cannot be imported, and the local industry's generic focus means it has immense potential to increase these exports.

Algeria’s pharmaceutical expenditure increased greatly in previous years, from DZD159 billion ($2.35bn) in 2008 to an estimated DZD209 billion in 2013, growing at a compound annual growth rate (CAGR) of 5.62% in local currency terms. Long-term predictions suggest this strong growth will continue, with the market potentially reaching DZD407.14 billion by 2019.

“You cannot go to any laboratory or plant belonging to a multinational or a national private company without finding managers who learned their craft with SAIDAL.”

Boumediene Derkaoui, CEO of SAIDAL

Created in April 1982 following the restructuring of the Algerian Central Pharmacy (PCA), SAIDAL became a public company in 1989 following the implementation of economic reforms.

The CEO of the African pharmaceutical giant, Boumediene Derkaoui, recently explained the reasons behind the country’s rapidly growing healthcare sector and especially its pharmaceuticals industry, stating “it should be noted that the Algerian market is the second-largest market in Africa in terms of both value and volume. Our market is just behind South Africa and ahead of Egypt despite the vast differences in the population of each of our three nations.

“Algeria has a market that totals more than $2.5 billion and our per capita consumption of medication has been growing steadily for years. Today, we are not far from reaching a spending of $80 per capita per year. The market in 1999 was between €240-250 million. Today it is over €1.7 billion. That is an incredible six-fold increase in market value in just over a decade and it gives you some idea of the potential the pharmaceuticals market has for growth.”

The CEO went on to say that the growth in the market value has been thanks to some forward thinking healthcare initiatives set up by the Algerian government. “This increase is primarily due to the simplifications made by our public authorities in relation to access to drugs and pharmaceuticals for the Algerian public. Our system is one of the most improved and advanced in the world – it’s free. You are 100% reimbursed for any and all medications regardless of whether you have social insurance or not.”

In October 2010, the Algerian government signed a letter of intent with a number of U.S. firms aimed at bringing investment to the country’s pharmaceutical and healthcare sector in areas such as technology transfer, research and development, and direct investments. At this time SAIDAL announced that it was to start work on a modernization program worth €1.4million aimed at increasing production capacity at eight of its manufacturing facilities based in Algiers, Cherchell, and Medea. The improvements will increase SAIDAL’s drug production capabilities from 135 million to 298 million sales units, as well as raise the firm’s standards of quality to that of European levels.

The improvements are being financed by a National Investment Fund loan, which allocated €180 million to the SAIDAL Group’s five-year

development plan. At the same time, Pfizer-SAIDAL Manufacturing, a collaboration between American pharmaceutical giant Pfizer’s local subsidiary Pfizer Pharm Algeria and SAIDAL, announced that it is to begin the production of an unspecified major anti-inflammatory treatment. The anti-inflammatory medication is currently one of approximately 20 products imported by the company, which also manufactures about 18 products at its Algiers plant.

While Algeria’s pharmaceuticals industry continues to grow and improve exponentially each year, Mr. Derkaoui can boast of how SAIDAL has contributed heavily towards the country’s improved healthcare sector: “Throughout the last decade in particular we have played a major role as breadwinner for the industry. We also became a training center, almost, because you cannot go to any laboratory or plant belonging to a multinational or a national private company, without finding managers who learned their craft with SAIDAL.”

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