Hikma Pharma unveils $300 million expansion
Hikma Pharmaceuticals, a generic drug and injectables specialist based in Amman, Jordan, plans to spend nearly $300 million in 2012 on acquisitions and expansion initiatives in the Middle East and North Africa, according to Hikma’s CFO, Khalid Nabilsi.
"In terms of acquisitions, we can do $150 million to $200 million this year through debt. We are also planning to invest $90 million on expansions at the group level financed by the internal cash generation," Nabilsi said. "Our focus in 2012 is going to be on product acquisitions that complement our businesses.”
Hikma, which sells branded drugs and has an injectable drugs businesses in Europe and the U.S., expects to benefit from people demanding a better quality of life as a result of the Arab Spring.
"The new regimes and governments believe more in social services; they are committed to investing billions on healthcare and education," Nabilsi said.
Healthcare spending per capita in the Mena region is below $100, compared with $900 in the U.S. and Europe, explained Nabilsi. The sector is witnessing 12% growth in the region, compared with 2% in Europe.
Hikma generates almost 50% of its revenue from the Mena region, operating in 17 countries in Mena, with plants Morocco, Egypt, Tunisia and Sudan. Hikma also has plants in Europe and the U.S.
Nabilsi said he was expecting a strong performance in 2012, with revenue growth expected to be about 20%, driven by opportunities in Mena and the global injectable drugs market. The company is eyeing expansion in Iraq, Turkey and North Africa, Nabilsi commenting that Turkey was a big market while South Africa was an "interesting opportunity."
Hikma gave a positive outlook for 2012 growth last month despite a dip in profits for 2011, reflecting a weaker performance from its generics drugs units and costs from higher wages and currency fluctuations in the Mena region.