Ras Al Khaimah's pharmaceutical success story is planning to expand further abroad while it consolidates its position locally.
Julphar looks to a healthy future in the UAE and abroad
The UAE pharmaceutical company Julphar is scouting for a larger market beyond the Middle East as part of its ambitious expansion plans.
Based in Ras Al Khaimah, it is among the few companies in the sector to grow out of the Arabian Gulf region and it is doing very well.
In the first half of this year, Julphar's sales grew to Dh696.4 million, up 10.5 per cent year-on-year. Gross profit was Dh412.1 million, an increase of 8.3 per cent.
It is now eyeing Latin America, central Asia and South East Asia to spread its wings.
Listed on the Abu Dhabi Securities Exchange, Julphar was formed in 1980 out of the need to develop Ras Al Khaimah's non-oil economy. Four years later, its first plant started manufacturing tablets and capsules. Julphar specialises in generics, primary care and over the counter products, which it then exports to other Middle East countries. Julphar sells more than 220 products in the UAE alone. But it is widening its remit.
Also known as Gulf Pharmaceutical Industries, it is now focusing on chronic diseases as well as women's health products. It expects to introduce gynaecological products in association with an Italian company by the end of the year.
Two years ago Julphar started selling in Ecuador, which will be the centre of its expansion strategy in rest of South America, says Basel Aboujalala, Julphar's director for the Arabian Gulf region.
It is also in talks with companies and governments in South Africa, Nigeria, Senegal, Kazakhstan, Azerbaijan, Uzbekistan and Armenia. The company has already registered more than 30 products in eastern Europe and expects to start selling them there soon.
Afghanistan is one of its bigger markets and the company is in talks with partners in Indonesia and the Philippines to expand there.
"There is tough competition, but each market needs to be handled individually," Mr Aboujalala says.
As of 2011, Saudi Arabia was the largest market for Julphar, which has a market cap of Dh2.6 billion today, followed by the UAE. Of its current sales, the UAE contributes 12 to 15 per cent, while almost 20 per cent comes from Saudi Arabia, Mr Aboujalala says. Iraq is its third largest market, accounting for around 10 per cent of sales. Other important markets include Lebanon, Egypt, Libya, Jordan and Sudan.
The company has 11 manufacturing facilities in Ras Al Khaimah and one in Ethiopia, which opened in February. Last September, it opened its lastest insulin manufacturing plant in Ras Al Khaimah with a capacity of 1,500kg of insulin per year, or 45 million vials.
It will expand its manufacturing facilities to Dubai's Jebel Ali by the end of this year and to Abu Dhabi in the first half of next year, Mr Aboujalala says. Both are expected to manufacture medicines for chronic diseases while insulin production will still be based in Ras Al Khaimah.
Insulin is Julphar's strongest selling product. It is the fifth-largest insulin producer in the world, and the only one in the Middle East. About a tenth of the company is owned by the Government of Ras Al Khaimah, and other shareholders include the Islamic Development Bank.
In 2011, the Algerian government announced that Julphar planned to start a US$26m factory in Algiers. The company has already laid the foundations to set up a manufacturing unit there but has not yet set any timetable for the completion of the plant, Mr Aboujalala says.