- Drugmaker seeks Africa revenue growth of almost 10% a year
- Construction about to start on manufacturing plant in Algeria
AstraZeneca Plc, the U.K.’s second-largest drugmaker, plans to increase sales in Africa by almost 10 percent a year as the company seeks to capitalize on efforts by governments to improve health-care systems and fight conditions such as high blood pressure and cholesterol.
Construction is about to start on a manufacturing plant in Algeria costing “tens of millions of dollars,” Tarek Rabah, the company’s vice-president for the Middle East and Africa, said in an interview in Ethiopia’s capital, Addis Ababa. The factory will make drugs to treat cardiovascular disease, cancer and diabetes. AstraZeneca also has a plant in Egypt that manufactures drugs to lower blood pressure and cholesterol.
“If you want to expand in Africa you need to understand this is a long-term effort,” Rabah said. “You need to be an active contributor to really strengthen the health-care system.”
Africa’s pharmaceutical industry generated sales of $20.8 billion in 2013, compared with $4.7 billion a decade earlier, McKinsey and Co. said in June. The market may be worth as much as $65 billion by 2020, according to the consultants. London-based AstraZeneca’s annual sales on the continent are less than $500 million out of a 2015 global total of $24.7 billion, Rabah said.
AstraZeneca signed an agreement on Feb. 3 with Ethiopia’s health ministry to screen for high-blood pressure after a similar initiative in Kenya started in October 2014 identified 150,000 people with the condition.
While the health-care industry focus in Africa has been on combating communicable diseases like malaria, action needs to be taken to tackle illnesses such as those caused by heart problems, Rabah said. More than 50 percent of deaths across the continent are projected to be caused by non-communicable diseases by 2030, he said.
“If the health-care system is actually developed we have an opportunity to better serve the patients,” he said.
AstraZeneca plans to conduct more clinical trials on the continent and increase the number of existing and new pharmaceuticals available to Africans, Rabah said. Growth in Africa would give a boost to the drugmaker, which forecast on Feb. 4 that total profit and sales would decline this year as its best-selling cholesterol medicine loses market exclusivity in the U.S.
The company’s shares traded 0.6 percent lower at 3,985 pence as of 12:12 p.m. in London, extending the decline this calendar year to 14 percent. That compares with an 11 percent fall on the FTSE 100 Index in London, giving the company a market value of 50.4 billion pounds ($73 billion).