KUALA LUMPUR: Pharmaniaga Bhd, controlled by conglomerate Boustead Holdings Bhd, has roped in two potential foreign partners to assess the feasibility of building and operating a pharmaceutical factory in Saudi Arabia.
In a statement to Bursa Malaysia, Pharmaniaga said it had signed a memorandum of collaboration (MoC) with Saudi Arabia-based Modern Industrial Investment Holding Group Co Ltd and US-based E*Healthline as initial arrangements for a potential joint venture.
The collaboration will see these companies using Saudi Arabia as a distribution hub from which the pharmaceutical goods would be exported to other Middle Eastern and North African markets.
“The MoC shall be valid for 30 days or any extended period to be mutually agreed upon in writing between the parties.
“In contemplation of entering into a definitive agreement within 30 days from the date of this MoC or any extended period to be mutually agreed upon in writing, the parties agree to specifically negotiate and finalise terms and conditions which will form the basis of the definitive agreement, including but not limited to, the scope and obligations of the parties in connection to the project,” Pharmaniaga said.
Modern Industrial is involved in the business of constructing, owning and operating manufacturing facilities in Saudi Arabia. E*Healthline is involved in integrated healthcare information management systems.
Pharmaniaga said the proposed collaboration required the approval of the Saudi Arabian General Investment Authority, Health Ministry, and Saudi Food & Drug Administration.
Pharmaniaga’s overseas ventures are deemed crucial to sustain the company’s growth. According to Pharmaniaga’s annual report, stiff competition in the generic drug market has resulted in a reduction in profit margins for manufacturers. As such, Pharmaniaga said it is on the lookout for potential acquisition targets abroad which would generate higher returns for the company.
The company has indicated that it is planning to enter into more Southeast Asian markets and expand its portfolio of generic drugs in the next five years. Abroad, Pharmaniaga already has pharmaceutical distribution operations in Vietnam and Indonesia, and the firm does not discount the possibility of setting up pharmaceutical factories in these markets.
However, the immediate concern is strengthening the company’s Malaysian government concession operations which account for 60% of Pharmaniaga’s business.
The Health Ministry here renewed a pharmaceutical supply concession with Pharmaniaga for 10 years from December 2009 to December 2019. The renewal followed the expiry of Pharmaniaga’s previous concession term of 15 years in November 2009.
The concession involves the right to purchase, store, supply and distribute medical products to government hospitals.
State investment arm Khazanah Nasional Bhd’s wholly owned subsidiary UEM Group Bhd had sold its entire stake of 86.81% in Pharmaniga to Boustead for some RM534 million or RM5.75 a share in June 2010.
This article appeared in The Edge Financial Daily, October 28, 2011.
In a statement to Bursa Malaysia, Pharmaniaga said it had signed a memorandum of collaboration (MoC) with Saudi Arabia-based Modern Industrial Investment Holding Group Co Ltd and US-based E*Healthline as initial arrangements for a potential joint venture.
The collaboration will see these companies using Saudi Arabia as a distribution hub from which the pharmaceutical goods would be exported to other Middle Eastern and North African markets.
“The MoC shall be valid for 30 days or any extended period to be mutually agreed upon in writing between the parties.
“In contemplation of entering into a definitive agreement within 30 days from the date of this MoC or any extended period to be mutually agreed upon in writing, the parties agree to specifically negotiate and finalise terms and conditions which will form the basis of the definitive agreement, including but not limited to, the scope and obligations of the parties in connection to the project,” Pharmaniaga said.
Modern Industrial is involved in the business of constructing, owning and operating manufacturing facilities in Saudi Arabia. E*Healthline is involved in integrated healthcare information management systems.
Pharmaniaga said the proposed collaboration required the approval of the Saudi Arabian General Investment Authority, Health Ministry, and Saudi Food & Drug Administration.
Pharmaniaga’s overseas ventures are deemed crucial to sustain the company’s growth. According to Pharmaniaga’s annual report, stiff competition in the generic drug market has resulted in a reduction in profit margins for manufacturers. As such, Pharmaniaga said it is on the lookout for potential acquisition targets abroad which would generate higher returns for the company.
The company has indicated that it is planning to enter into more Southeast Asian markets and expand its portfolio of generic drugs in the next five years. Abroad, Pharmaniaga already has pharmaceutical distribution operations in Vietnam and Indonesia, and the firm does not discount the possibility of setting up pharmaceutical factories in these markets.
However, the immediate concern is strengthening the company’s Malaysian government concession operations which account for 60% of Pharmaniaga’s business.
The Health Ministry here renewed a pharmaceutical supply concession with Pharmaniaga for 10 years from December 2009 to December 2019. The renewal followed the expiry of Pharmaniaga’s previous concession term of 15 years in November 2009.
The concession involves the right to purchase, store, supply and distribute medical products to government hospitals.
State investment arm Khazanah Nasional Bhd’s wholly owned subsidiary UEM Group Bhd had sold its entire stake of 86.81% in Pharmaniga to Boustead for some RM534 million or RM5.75 a share in June 2010.
This article appeared in The Edge Financial Daily, October 28, 2011.
