Healthy Industry

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With the largest industrial base of the all the emirates, Ras Al Khaimah has long been considered the workshop of the United Arab Emirates (UAE) and one of the pillars has been the pharmaceutical industry. With billions of dollars of investments being made in recent years, the industry is now rapidly growing into a major player.

The pharmaceutical industry in the Middle East is now worth around $8bn, with 196 producers competing for around 70% of the local market. Ras Al Khaimah has placed itself at the centre of that industry by both investing in the home grown industry while aggressively pursuing foreign investment in the emirate's free industrial zones. The Ras Al Khaimah free zone, which includes three industrial zones, is now the fastest growing economic free zone in the Gulf Cooperation Council (GCC). There are currently 10 chemical companies based in the emirate and three of them are wholly foreign owned entitities. The industry also employs more that 1500 workers and is expected to be a key industry for both job creation and skills development going forward.

Ras Al Khaimah-based Gulf Pharmaceutical Industries, known as Julphar, has become a leader in pharmaceutical production in the region thanks to some hefty investment made by the government in recent years. Julphar currently has 477 pharmaceutical products patented in the UAE and is seeking more patents abroad. Earlier this year, Julphar acquired 12.2% of India's SMS Pharmaceutical for Rs300m ($7.5m). The company is one of the biggest producers of Ranitidine HCL in the world and has US FDA approval as an active pharmaceutical ingredients (API) manufacturer and a considerable API portfolio.

Julphar currently has a five year plan to expand into new markets and to increase its sales worldwide. The company plans to invest Dh1bn ($272m) in various expansion programmes that will see the building of 11 new manufacturing plants of which seven will be built within the UAE. Meanwhile, the company is expanding rapidly abroad with four new manufacturing plants being built in Morocco, Sudan, Afghanistan and Bangladesh. According to reports, Julphar will invest Dh797m ($217m) in the company's UAE expansion while spending Dh288m ($78.5m) on foreign ventures.

To prepare for such a rapid expansion, Gulf Pharmaceutical Industries is also planning to transform itself into a holding company and to open up the various operations to public ownership. Shaikh Faisal Bin Saqr Al Qasimi, the company's chairman, was recently quoted in the local press as stating that the move was aimed at diversifying the company's investments. The plan is to issue 8m shares to the country's pharmacists and physicians in appreciation for their efforts.

To facilitate this expansion, the Ras Al Khaimah government has granted Julphar 2.5m sq ft of free land. The company is building an extra 160,000 cubic metres of storage capacity to accommodate the production of the raw materials in the company's new plants.

The first of the two new plants to be built in the UAE is expected to be operational by the end of 2007. The two latest factories will be called Julphar 8 and 9 and will specialise in antibiotic powders and ointment products with a combined capacity of 50m units. When completed, it is expected that Julphar 8 and Julphar 9 will increase sales to Dh2.25bn ($612m).

Construction work for two more factories called Julphar 10 and 11 also began in 2007 and the plants are set to be operational by June 2009. The plants will produce biotech products and will have a capacity of 37m units a year. Under the plans, four of the proposed seven plants in the UAE will be focused on finished pharma products while the remaining three plants will produce raw materials. Analysts view the production of raw materials as a strategically vital part of the company's plan to expand and increase sales. Currently the company imports the majority of its raw material needs from American and European companies. Producing raw materials in-house, so to speak, will be a vital development if the company is to keep prices low and remain competitive.

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