Cipla to build a manufacturing plant in Morocco with local partners

Cipla, which has been building beachheads and production capacity in hot spots where most Western drugmakers are loath to go, will now create a joint venture in Morocco and build a drug manufacturing facility there.

The Indian company said its U.K. subsidiary will invest $15 million in a JV with Societe Marocaine De Cooperation Pharmaceutique (Cooper Pharma) and The Pharmaceutical Institute (PHI). Cipla describes Cooper and PHI as the leading manufacturing companies in Morocco.

Cipla CEO Subhanu Saxena

"Morocco is an attractive pharmaceutical market in the African continent," Cipla CEO Subhanu Saxena said in a statement. The North African country is a constitutional monarchy with an elected parliament and is currently in conflict with the Islamist group ISIS.

Cipla, Cooper and PHI have had a partnership for 10 years that has allowed Cipla to get established in Morocco. The joint venture, in which Cipla will hold a 60% stake, will provide what the drugmaker calls a "front-end presence in Morocco's pharmaceutical market" to sell its products. The JV will start with respiratory and neurology products but will also build a manufacturing plant in the country to produce Cipla meds. A spokesperson for Cipla said in an email Tuesday that the company is not yet in a place to say how large of a plant will be built, or when that might begin.

"This JV is aimed to strengthen Cipla's presence in Morocco, which is in-line with our global growth strategy to build front-end presence in key markets," Saxena said.

Cipla is not the only drugmaker making inroads in Morocco. French drugmaker Sanofi ($SNY) has a presence there, with a program to train health professionals. It followed that up in 2013 with a €20 million investment to build a 12,000-square-meter logistics operation in Ain Sebâa, Casablanca, from which it could better distribute its products.

The Morocco deal is one in a series in which Cipla has spread its influence in North Africa and the Middle East. Last fall, it announced a deal with "its existing Iranian distributor establish a manufacturing facility in Iran. There were no details, but Cipla reported it would contribute machinery, equipment and technical know-how over the next three years, an investment it put at about $36.5 million. For that, it said it will get a 75% ownership in the new operation. Several months earlier, it was a deal in Yemen, in which it bought a 51% stake in a pharmaceuticals manufacturing and distribution business that it refused to identify. It said it was paying $21 million up front and then making milestone payments over three years if sales goals were hit.

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