2013-02-02 16:00:39 - Recently published research from Business Monitor International, "Kazakhstan Pharmaceuticals & Healthcare Report Q1 2013", is now available at Fast Market Research
BMI View: Kazakhstan's pharmaceutical market remains the most accessible, transparent and, from a legislative point of view, progressive in Central Asia. In terms of market size, its potential is limited by its relatively small population (15mn) and logistical challenges. In the short term, Kazakhstan's market development is driven by a balanced policy of import substitution and integration into regional (Customs Union) and global (World Trade Organisation) systems. Over the longer term, the country could leverage its favourable business environment and regional ties to supply neighbouring states, such as Uzbekistan, Kyrgyzstan, Turkmenistan and Tajikistan, all of which have growing populations and lack domestic production capacity. The country's government is in the middle of implementing an industrial development policy for pharmaceuticals and
three of the top five producers - Chimpharm, Nobel and Global Pharm - are now controlled by foreign investors. The primary threat to the industry and foreign investment is the spectre of political instability (and consequent economic instability) that may occur when President Nursultan Nararbayev, who has led the country since Soviet times, leaves the scene. This is especially relevant as no heir is yet in place.
Full Report Details at
- www.fastmr.com/prod/529413_kazakhstan_pharmaceuticals_healthcare ..
Headline Expenditure Projections
* Pharmaceuticals: KZT218.1bn (US$1.46bn) in 2012 to KZT245.4bn (US$1.65bn) in 2013; up 12.5% in local currency terms and 12.8% in US dollar terms. Forecast adjusted up slightly due to updated exchange rate forecasts.
* Healthcare: KZT1,165.2 (US$7.82bn) in 2012 to KZT1,330.3bn (US$8.95bn) in 2013; up 14.2% in local currency terms and 14.5% in US dollar terms. Forecast adjusted up slightly due to updated exchange rate forecasts.
* Medical Devices: KZT93.35bn (US$630mn) in 2012 to KZR102.3bn (US$690mn) in 2012; up 9.5% in local currency terms and 9.8% in US dollar terms. Forecast adjusted up due to new data and updated exchange rate forecasts.
Risk/Reward Rating: Kazakhstan ranks 14th out of 20 in BMI's Risk/Reward Ratings for Emerging Europe this quarter. The market's key attractions include a liberalising regulatory system and positive outlook for WTO accession in 2013, as well as strong economic growth and the growing pace of state investment in healthcare. Downsides include a small population, infrastructure challenges and the reliance of the economy on commodities, which poses nearly permanent exchange rate risks and exposure to volatility. The country's largest single risk, however, is the reliance of the political system on President Nazarbayev, who has presided over two decades of rapid development but also hindered the development of effective governance that will outlast him
Key Trends And Developments
Kazakh officials have reiterated their timeline for concluding final talks around WTO accession in early 2013. BMI believes the domestic industry is now better prepared for WTO membership, as three of the main producers are owned by foreign companies and several projects to build production facilities and launch new products are already well on the way. Nonetheless, we predict WTO entry, coupled with the phasing in of Good Manufacturing Production (GMP), will hasten the exit of all but the top five to 10 producers from the marketplace in the next five years. Meanwhile, Customs Union (CU) officials reiterated in November that Russia's WTO membership and Kazakhstan's near-term accession would not threaten the trade grouping, despite Belarus sitting outside of the WTO. The state secretary of the union said Belarus could manage WTO accession in the next two years, according to Russian news agency RIA Novosti; however, we believe this to be improbable.
?? In mid-November 2012, Turkey's Abdi Ibrahim announced it would build a new pharmaceutical plant as part of its tie-up with Kazkh generics producer Global Pharm. According to media reports, the plant represents a US$60mn investment, and Abdi Ibrahim is to have a controlling stake. Initial news of the project was announced in October during a visit by the Kazakh president to Turkey in October. As BMI has previously reported, it appears Abdi Ibrahim took a stake in Global Pharm earlier this year. The local firm has sought in recent years to raise finance to build a new, GMP-compliant generics production plant in the outskirts of commercial capital Almaty, where it operates an existing plant. The project was reportedly part of the 'Roadmap' document for the development of the industry approved by the government in early 2010 as part of its Accelerated Industrial Development Programme. ?? In October, Czech pharmaceutical plant and 'turnkey' GMP solutions provider FAVEA announced it had signed deals worth EUR36.5mn to build production facilities for Kazakh players Romat and Pavlodar Pharmaceutical Plant, which is part of the Romat group. The deals represent additional signs of progress in implementing the government's Roadmap, although we are awaiting more details about the scope of these projects.
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