Hikma Pharmaceuticals has signed onto a joint venture with MIDROC Pharmaceuticals to establish a presence in the Ethiopian pharmaceutical market.
The JV will be called HikmaCure and London-based Hikma and MIDROC will invest in equal proportions and have committed to provide up to $22.3m each in cash.
The combined company over the next five years will establish an Ethiopian operating company, build a local manufacturing facility and begin marketing and distributing pharmaceuticals in Ethiopia. In the short term, MIDROC will work with Hikma and HikmaCure to register, market and distribute Hikma’s products in the Ethiopian market.
“We believe 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. We will continue to explore opportunities to build our presence in the sub-Saharan region,” Said Darwazah, CEO of Hikma said.
The Ethiopian pharmaceutical market is valued at over $500m and is growing at a compound annual rate of around 15% and is expected to reach approximately $1bn in 2018. Currently about 75% of the market there is based on pharma imports.
The funds for the JV will be invested to build and fit-out a local manufacturing and distribution facility in Ethiopia and to provide working capital support for the operations of HikmaCure. The facility is expected to begin commercial production in 2017.