Mumbai: Indian drugmaker Cipla expects to match domestic industry growth of 14% this year, the firm’s chairman said on Thursday, but warned of a possible slowdown in certain African nations due to political instability.
The Mumbai-based firm, which commands the largest share of India’s pharmaceuticals market, has business interests in Libya, Syria and Algeria, where popular uprisings have led to widespread protests and violence in some cases.
“There has not been major impact on the overall Africa business but only certain countries have a slowdown due to the political situation in the last year,” Yusuf Hamied told an annual meeting of shareholders.
Africa accounts for 42% of Cipla’s total exports while the Middle East contributes 9%.
Emerging markets such as India, where the drug market is expanding at 12% to 15% annually, are set to become the main driver for the global pharmaceuticals industry as patents run out on many top drugs and sales stall in Western markets.
Domestic sales contribute 45% of Cipla’s total revenue. The company, known for selling low-cost generic versions of anti-retroviral drugs used to fight HIV/AIDS, has a salesforce of around 7,000 people.
“We will continue to increase our market share in India through more penetration in the rural segment henceforth,” Hamied said. “So far the major penetration for the drug market has been in the urban region.”
India’s third-largest drugmaker by sales plans to spend around Rs600 crore ($130.4 million) to expand and set up active pharmaceutical ingredients (API) units across India over the next two years and expand its two research centres in the country.
“For this year, the company’s capex (capital expenditure) would be inclined towards APIs and not formulations. That is the strategy,” Cipla’s chairman added.
The drugmaker and domestic rival Lupin on Wednesday denied as “baseless” a newspaper report that they were in talks with Takeda Pharmaceutical Co for Japan’s largest drugmaker to purchase some of their business.
Cipla’s shares closed down 0.4% at Rs279.85 ($6.08) in Mumbai stock market that closed down on global growth slowdown fears.