The Kilinto Industrial Park, which is being constructed by the China Tiesiju Civil Engineering Group, is set to become operational mid-2018.
The park is a valuable addition to the ongoing transformation of Ethiopia’s healthcare sector, which is part of the country’s push to develop the national pharmaceutical industry to reduce its dependence on imports. According to a paper presented by Ethiopian Investment Commission (EIC) Commissioner Fitsum Arega and Minister of the Ethiopian Ministry of Trade Mebrahtu Meles, the country purchases 80% of its medicine and medical equipment from abroad. Local pharma companies are able to provide only 90 of the approximately 380 products on the national list of essential medicines. And of these, around 20% are produced with imported components. China and India are among Ethiopia’s most active generic drug suppliers.
Located south of Addis Ababa, the 337ha, mixed-use Kilinto Industrial Park will be used by the textile, agro-food, electronics and pharmaceuticals sectors. The park will be developed in two phases: the first in collaboration with the World Bank and the second with the China Tiesiju Civil Engineering Group. Unlike other sectors, pharma is new to Ethiopia, and to develop the sector, the government has been discussing possible tax incentives – but has yet to outline them in detail. The park is expected to attract multinational pharma companies and will also help the local industry to grow.
Certain foreign investors have announced plans to build new factories or expand existing ones. In September 2016, Kilitch – an Indian company with its Kilitch Estro Biotech branch in Addis Abeba – submitted a proposal to build a factory in a zone it leased for 45 years in the special area of Oromia. The company has yet to provide details on the size and cost of the project. In June 2016, the Chinese company Humanwell Healthcare signed on for a USD 90m project in the Hagernaraim Kesem district (in the region of Amhara, 65km north of Addis Abeba), with construction set to begin next year.
Local companies are also growth-oriented. Addis Pharmaceutical Factory is looking to extend production: it is building a new factory and is set to launch 60 new products, which will bring the company’s portfolio to 150 drugs. This growth is possible thanks to an agreement with London-based 54 Capital, which in January 2016, purchased 40.7% of Addis Pharmaceutical Factory for USD 30m. Ethiopian Pharmaceuticals Manufacturing (EPHARM) – a former state company purchased by Medtech Ethiopia in 2005 – is on the verge of wrapping up its USD 100m-expansion plan announced in 2015.
The Ethiopian pharma industry brings in approximately USD 500–800m annually and has profited from the country’s economic growth, the improvement of medical care and a new health insurance regime introduced in 2016. According to government forecasts, the sector could grow as much as 25% in the next four years, reaching over USD 1bn by the end of 2018.
Sources: http://www.ice.gov.it/home.htm; http://www.ipdc.gov.et; http://www.chinagoabroad.com/en/article/ethiopia-pharmaceuticals-q2-2017-asoko-sector-brief; https://addisfortune.net/articles/govt-plans-industrial-park-for-pharmaceuticals/
