Julphar was the first pharmaceuticals manufacturing company to start up in the Gulf. Although the UAE imports 90 per cent of its drug requirements, the company has built up a successful export-oriented business model.

The company has been pursuing an aggressive expansion plan over the past three years in order to ramp up production in the UAE. The arrival of the new capacity has coincided with the global financial crisis, but as the company mainly produces lower priced generic drugs, the impact on demand has been minimal.

Healthcare is a sector that is more or less recession-proof as demand is unaffected by the health of the economy. Prudent business decisions taken in the years prior to the economic crisis taking hold late last year will have protected the company to some extent. For example, it was able to monetise its retail pharmacy assets through the link-up with Global Investment House.

The company also established its own logistics firm, which together with its 9 per cent stake in pharmaceutical ingredients producer, SMS Pharmaceuticals, will give it some control over its costs.

Over the long term, Julphar’s decision to focus on expanding its sales in the Middle East, North Africa and Asia will stand it in good stead, as pharmaceuticals demand growth is forecast to be strongest in emerging markets during the next five years.

Julphar financials ($m)