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Algeria Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Aug 2011, Pages: 80
Business Monitor International's Algeria Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Algeria's pharmaceuticals and healthcare industry.
BMI View:
Algeria is currently a high-risk market for multinational drugmakers because of the combination of regional political uncertainty and state interference in its business environment. The country's protectionist import policies, together with its failure to anticipate consumer demands, are expected to damage total drug sales in 2011. Nevertheless, BMI remains optimistic about the overall market's future growth prospects.
Headline Expenditure Projections
- Pharmaceuticals: DZD205.6bn (US$2.84bn) in 2010 to DZD216.3bn (US$3.03bn) in 2011; +5.2% in local currency terms and +6.6% in US dollar terms. Forecast down significantly from Q311 because of protectionist import policies.
- Healthcare: DZD604.9bn (US$8.35bn) in 2010 to DZD679.5bn (US$9.51bn) in 2011; +12.3% in local currency terms and +13.8% in US dollar terms. Forecast unchanged from Q311.
- Medical devices: DZD31.8bn (US$439mn) in 2010 to DZD36.57bn (US$512mn) in 2011; +15.0% in local currency terms and +16.5% in US dollar terms. Forecast up marginally from Q311 due to analyst revision.
Business Environment Rating:
In Q411, we find Algeria has moved down the ratings to occupy 13th position of the 19 regional markets surveyed in the Middle East and Africa region. Algeria’s pharmaceutical rating is 46.0, which is marginally below the average of 48.3 for the region.
Key Trends & Developments
- Sanofi's Algerian subsidiary has reiterated plans to extend its manufacturing capabilities by investing in its plant in the town of Sidi Abdellah. The extended facility could eventually produce 80% of the country's pharmaceutical needs in volume terms and the investment is thought to be worth around DZD6.6bn (US$92.3mn). Although the deal was initially agreed in February 2011, it was also restated at the Algeria- France partnership forum in late May 2011.
- Two Algerian health unions ended their strikes in May 2011, after the Health Ministry promised to improve salaries and working conditions. The unions were demanding revisions in salaries of the healthcare workers and their job positions. SNPSP and the National Union of Specialised Public Healthcare Workers (SNPSSP) comprise about 30,000 members, including doctors, dentists and pharmacists.
BMI Economic View:
Despite the rise in global food commodity prices and the prospect of Ramadan increasing the demand for foods, and thereby keeping prices elevated, we maintain our long-held view that the Algerian government's subsidies will be successful in containing inflationary pressures. We therefore forecast consumer price inflation to average 4.0% in 2011, and decrease slightly to average 3.0% throughout 2012. However, the government's ambitious spending plans announced for 2011, coupled with relatively limited resources, pose upside risks to our inflation forecasts, especially should prolonged protests cause disruptions in Algeria's hydrocarbons production cycles and wheat and grain prices rise increasingly more sharply in the coming months.
BMI Political View:
BMI believes that Algeria is one of the biggest concerns to regional and global stability. The country shares the same fundamental economic, political and social weaknesses as exist in Egypt, Tunisia, Libya and Syria, the risks of large-scale unrest in these states is significant. Given their importance as oil producers, instability here would also potentially result in a spike higher in oil prices.
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