Gov’t Plans Industrial Park for Pharmaceuticals

Ethiopian officials have disclosed their plan to establish industrial parks dedicated to the pharmaceuticals industry during a closed meeting held at the Hilton Hotel last week with local pharmaceutical producers and importers. Officials from the Ethiopian Investment Commission and Ministry of Industry who were present at the meeting advocated the plans, which aims to complete the industrial parks and have them operational in the next two years.

Chaired by Fitsum Arega, the commissioner of EIC, and Mebrhato Meles (PhD), state minister for Industry, a draft document of an inception study conducted by the Prime Minister’s Office was presented to stakeholders. The rationale behind the establishment of the industrial parks is to transform the pharmaceuticals industry, which at the moment is highly dependent on imports. Out of the total demand for drugs, medicines and medical equipment in Ethiopia, 80pc to 85pc is imported.

Of the 15pc to 20pc locally produced pharmaceuticals get their inputs fully from imports.

Local manufacturers are capable of supplying only 90 of more than 380 products on the national essential medicines list.

During the last fiscal year, Ethiopia procured more than four billion Br worth of medical supplies and equipment and secured an additional 4.7 billion Br in kind from development partners. The document cited the experience of China, India, South Korea and Singapore as examples of how pharmaceutical industrial parks can be successfully established. It particularly emphasized the Chinese and Indian models as the two biggest providers of generic drugs to the global market.

Tax holidays were brought up in the document, again citing the experience of China and India.

Hopes are that the parks will attract multinational pharmaceuticals companies, as well as helping the local ones become more involved in large scale productions.

Possible tax incentives, support and assistance that will be provided for those who will be involved in the parks has yet to be detailed, although the document did state that support would be offered. “During the meeting, local producers raised their concerns about losing their position if the big multinational companies entered the local market,” said a pharmaceutical specialist who attended the meeting.

“This is not like agro-processing, textile or garment focused industrial parks,” a veteran importer said. “I don’t know how a sector that hasn’t always had a domestic value chain connection would be successful.”

For instance, agro-processing and textile industrial parks would be able to complement each other, according to the importer.

During the meeting, Qilinto, a place located in the southern outskirt of the capital was proposed for the establishment of the first pharma industrial park.

“It is too early to comment,” said Fitsum, the commissioner of the EIC.

Following the discussions with the respective stakeholders, the document along with the comments from the participants of the meeting comments will be submitted for approval in January 2017, according to a senior official from the Ministry of Industry.






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