New Market Research Report: Algeria Pharmaceuticals & Healthcare Report Q1 2014

From: Fast Market Research, Inc.
Published: Tue Jan 07 2014

Though we caution that operational risks in Algeria will remain elevated, the market is not only one of the largest in Africa, but also highly import-reliant, and thus of considerable interest of companies looking for new revenue sources. Government programmes for the modernisation of healthcare facilities will also support the development of per capita spending on pharmaceuticals going forward, although generic medicines will remain the largest beneficiaries of such trends, on account of public sector policies and low per capita purchasing power of much of the population.

Headline Expenditure Projections:

* Pharmaceuticals: DZD245.57bn (US$3.16bn) in 2012 to DZD272.95bn (US$3.64bn) in 2013; +11.1% in local currency and +15.3% in US dollar terms. Forecasts broadly unchanged in relation to the previous quarter's projections, though top line historical figures revised to incorporate higher population numbers.
* Healthcare: DZD666.75bn (US$8.57bn) in 2012 to DZD746.94bn (US$9.96bn) in 2013; +12.0% in local currency and +16.2% in US dollar terms. Forecasts broadly unchanged in relation to the previous quarter's projections.

Full Report Details at

Risk/Reward Rating: In our Q1 2014 Risk/Rewards Ratings (RRR) tool, Algeria occupies an unchanged ninth position out of the 30 countries surveyed in the Middle East and Africa (MEA) region. Algeria's score for its Industry Rewards variable indicates the country's favourable longer-term standing in terms of its pharmaceutical market development, with this view supported by recent foreign direct investment (FDI) initiatives. However, we continue to envisage elevated risks, not just from a political perspective, but also on account of healthcare funding.

Key Trends And Developments:

* In September 2013, French Sanofi revealed that the construction of its third manufacturing plant in Algeria is under way. The disclosure follows the December 2012 visit by French President Francois Hollande, which saw Sanofi receive a land concession for a planned investment in Sidi Abdellah, near Algiers. Sanofi's third fixed investment in Africa highlights the long-term commercial opportunities available to the company and illustrates ongoing confidence in the Algerian business and regulatory environment.

BMI Economic View: We forecast real GDP growth in Algeria of 3.2% and 4.4% in 2013 and 2014, respectively. Much of the acceleration in growth next year will result from a projected increase in gas exports. That said, growth in the domestic economy will remain relatively slack, a trend that we expect to continue over the medium term, on account of the government's unwillingness to liberalise the economy, as well as a relatively unwelcoming business environment.

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