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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