50 million dollar Hikma Cure Pharmaceutical SC awaiting the ratification of its investment license before beginning business in Ethiopia.
MIDROC Pharmaceuticals Ltd and Hikma Pharmaceuticals Plc, a Jordanian company, signed a formal agreement at the Ethiopian Investment Agency (EIA) on Tuesday April 8, 2014, to form HikmaCure Pharmaceutical S.C., pending approval of their agreement and the issue ofan investment license.
The agreement for the establishment of the Company was inked between Hani Qoto, Hikma's representativeand Abinet G. Meskel representing MIDROC Pharmaceuticals Ltd and was submitted to the agency as part of the application requirements.
"The process to acquire an investment license is now underway and will be finalized by next week," said an official from MIDROC, who talked to Fortune on the condition of remaining anonymous.
A source at Hikma, who likewise demanded anonymity, agrees with the official at MIDROC but declined to reveal details about the newly formed company, citing that he needs confirmation from the mother company.
Ahmednur Yusuf, Licensing& Registration Director, attended the signing ceremony on Tuesday, according to sources at the two companies, but he stressed that the two companies had not been to the Agency to sign any agreement.
Hikma and MIDROC signed a 50 - 50 joint venture (JV) agreement to establish a local pharmaceutical manufacturing company in Ethiopia back in September 2013.
The two accordingly agreed to invest in HikmaCure, the new venture, in equal proportions. While an initial investment of 50 million dollars was agreed, according to a joint press statement issued in September, the two companies had also agreed that HikmaCure would commence operations in Ethiopia by marketing and distributing close to 50 Hikma products.
The fund will be invested over an extended period of time and will be used to build and fit out a local manufacturing and distribution facility in Ethiopia and to provide working capital support for the operations of HikmaCure, Hikma Group said in its website.
The facility is expected to begin commercial production in 2017, according to Hikma's website.
Founded in Amman, Jordan in 1978 by Samih Darwazah, Hikma Pharmaceuticals Ltd is listed on the London Stock Market. The Company is engaged in manufacturing and distributing branded pharmaceutical products to the global market.
Ethiopia's pharmaceutical industry consists of 15 pharmaceutical and medical material production factories and only 5 of these are currently producing important items such as syringes, absorbent cottons and lab equipment.
As such the industry can at present serve only a small portion of the domestic market, with imports covering the rest of demand. In 2012, about 300 million dollars worth of drugs were imported, according to the Ethiopian Revenues & Customs Authority (ERCA), by 112 importers and wholesalers registered in the country.