Egyptian pharmaceutical companies require $1B for raw materials by year-end

Updated 10/2/2024 9:38:00 AM

Arab Finance: Egyptian pharmaceutical companies need $1 billion in the fourth quarter (Q4) of 2024 to import essential raw materials and production inputs, Head of the Pharmaceutical Division at the Federation of Egyptian Chambers of Commerce Ali Auf told Al Arabiya.

The required funding aims to boost Egypt's stock of pharmaceutical raw materials from the current three-month supply to at least six months, Auf added.

Since the beginning of 2024 to end-September, Egypt’s pharmaceutical factories have received approximately $2 billion in foreign currency, he estimated.

However, pharmaceutical companies require $3 billion annually to meet their needs of production inputs, as per Auf.

He also expects the sector’s demand for raw materials to grow over the coming period following government calls to raise the state’s raw materials reserves to a six-month period, compared to the seven-month stock maintained before the foreign currency shortage that began in March.

The shortage has caused significant disruption in medicine availability and raw material reserves.

In response, Auf highlighted that the Pharmaceutical Division has requested the Egyptian government to launch a special financing initiative with interest rates between 5% and 8% to help companies manage liquidity challenges exacerbated by the recent currency devaluation.

Currently, pharmaceutical companies can access financing through an industrial sector initiative with a 15% interest rate, but this is seen as insufficient due to the sector’s price controls.