Egypt Research Study Pharmacies June 2007
Investia Corporation
Egypt 2007
Table of Contents
I. Introduction…………………………………………………………………………………………………3 II. Revenues......................................................................................4 III. Challenges…………………………………………………………………………………………………4 IV. Overcoming Legality Obstacles…………………………………………………………………5 IV. Pharmacist in Egypt…………………………………………………………………..……………..5 V. Pharmaceutical Companies in Egypt………………………………………………………….6 1. Ezaby Pharmacy: Introduction……………………………………………………………………………………………..6 Strategic Goal………………………………………………………………………………………….7 Mission……………………………………………………………………………………………………..7 Services……………………………………………………………………………………………………7 Product line………………………………………………………………………………………………9 Production Sector…………………………………………………………………………………….9 Chain Outlets………………………………………………………………………………………9,10 2. Seif Pharmacy: Introduction…………………………………………………………………………………………….11 Strategic Goals………………………………………………………………………………………..11 Product line……………………………………………………………………………………………..12 Services……………………………………………………………………………………………………12 Organizational Chart……………………………………………………………………………….13 Chain Outlets…………………………………………………………………………………………..14 3. Ali's Image Pharmacy: Introduction……………………………………………………………………………………………..15 Mission………………………………………………………………………………………………………15 Department Marketing Department…………………………………………………………………………..16 Human Resource Department……………………………………………………………….16 Financial Department…………………………………………………………………………….16 Logistics Department……………………………………………………………………………..16 Chain Outlets…………………………………………………………………………………………….17 4. Ali & Ali Pharmacy: Introduction………………………………………………………………………………………………18 Mission………………………………………………………………………………………………………18 Services…………………………………………………………………………………………………….19 Product line……………………………………………………………………………………………….19 Chain Outlets…………………………………………………………………………………………….19 5. Misr Pharmacies: Introduction………………………………………………………………………………………………20 Product line……………………………………………………………………………………………….20 Services…………………………………………………………………………………………………….21 Chain Outlet………………………………………………………………………………………………21 VI. Conclusion…………………………………………………………………………………………………..22
2
I. Introduction: Egypt's pharmaceutical sector holds the largest domestic drug-manufacturing sector in the MENA region, supplying of the total market. There are 25,000 pharmacies in Egypt of which 20,000 are active. Most multinationals firms are active in the Egyptian Market. GlaxoSmithKline, is the largest producer in the local pharmaceutical sector in Egypt while EIPICO, is the largest Arab pharmaceutical company in the MENA region. The Egyptian pharmaceutical market is factor driven, gaining its competitive edge from low labor and infrastructure costs, which implies that pharmaceutical companies operating in Egypt can produce low-priced products for mass consumption, including export markets. Egypt is also implementing a reform program to modernize its health system in partnership with international organizations. The new system will aim to provide universal coverage, with high-income sections of the population subsidizing the remainder. The bulk of drugs consumed in Egypt are distributed through private pharmacies, and they account for a large proportion of total household spending on health. Until the mid-1990s, the sale of drugs in Egypt was very tightly regulated. The larger share of the domestic pharmaceutical industry was publicly owned and wholesale distribution was in the hands of the government. In addition, there has long been a system of retail price controls, which unlike in many other countries appears to be adhered to. All drugs sold in the Egyptian market require a license, and these licenses normally stipulate the price at which they must be sold. An organized system of reporting existed, and relatively good statistics have been available on the production, importation, exportation and retail sales volume of drugs. In Egypt, all pharmacies are obligated to go through an Investigation process, inorder to ensure that there are no illegal or unprescribed medicines sold in the pharmacy. Pharmacies in Egypt are permitted to sell non-pharmaceutical products, such as Beauty Care products, Hair care products, Baby Products, etc. These non- pharmaceutical products are considered as "Accessories". However only 30% of accessories are permitted
3
to be sold and if for any reason a violation of this law was made then a warranty is given. This law was issued from the National Association in Cairo. According to the new law that was recently issued stated that, if more than one pharmacy exist in the same regional area, then they must be located at least a 100 meters away from each other .The Ministry of Health in Egypt is responsible for issuing the license to every pharmacy. Furthermore, Pharmacist are forbidden from providing patients with any drugs unless it is prescribed by the patient's doctor. According to the (Law No. 127; issued in 1955), prices of medicine are constantly changing therefore, there are no price ceilings issued on any medicine. Considering the tax issue, pharmaceutical chains are taxed individually and not as a chain. II. Revenues: The Egyptian pharmaceutical market has grown at an accelerated rate to reach LE 5 billion in 2002. Strong investment opportunities exist in therapeutic groups and application of ecommerce is starting to develop. Nonetheless, removing challenges faced by the industry will, no doubt, accelerate performance and improve the overall outlook. The pharmaceutical sector accounted for 2.8 per cent of total investment (EL 7.1 billion) Until April 2005 .In 2003, the domestic market for synthetic products, excluding hospital sales, was worth EL 5.7 billion. Total sales in 2001 were EL 3.4 billion. Egypt's drug market was worth US$1.14bn in 2005 and is one of the largest in the Middle East and North Africa (MENA) region. Egypt's pharmaceutical market was worth EGP11.5bn (US$1.94bn) in 2005 III. Challenges Due to fixed price line on all pharmaceutical products, each pharmacy is required to establish a unique service that is different from its rivals. All pharmacies must have approval from the ministry of Health Department for selling all imported items in the pharmacy. The two impediments on the pharmacies that restrict them from in to chains are: a. Lack of sizable capital b. Lack of Retail and chain management
4
IV. Overcoming Legality Obstacles: The problem of legalizing the chain concept in Egypt is to separate the ownership of the Pharmacy as an asset from the management of the pharmacy and to create a management company that will manage several pharmacies on behalf of the owner. The management company responsible of creating the chain's image will be of responsible of the following: 1. Decoration and design of each Pharmacy 2. hire and train and develop the staff 3. Merchandize, by owning it, storing it and distributing it to pharmacies as well as to patients throughout the country. 4. advertisement campaign 5. Buy and operate a central IT system including a CRM component. 6. Operate a central customer service call center through a unified code number. 7. Business development and franchising. V. Pharmacist in Egypt: Today Pharmacists in Egypt have a major role to play in helping the Government improve public access to health care, to help people stay well and out of hospital and for patients to treat their conditions at home. Pharmacists have long shown that they have the skills and expertise to make a significant contribution to NHS services, improve public health and provide choice. Initiatives such as community-based minor ailment schemes, medicines use reviews and the long awaited introduction of Electronic Transfer of Prescriptions are all bringing pharmacists to the forefront of new advances.
5
VI. Pharmaceutical Companies in Egypt: Today 25,000 pharmacies are operating in Egypt of which 20,000 are active. The following pharmacy chains are the most successful in Egypt and in the Middle East Region: 1. El Ezzaby Pharmacy 2. Seif Pharmacy 3. Ali's Image Pharmacy 4. Ali & Ali Pharmacy
1. El Ezaby Pharmacy: El Ezaby Pharmacy was established in 1975, managed by Dr. Ibrahim El Okda. El Ezaby Chain pharmacy has the largest chain in Egypt that holds 30 outlets , 20 of these outlets are located in Cairo. Moreover, the Chain has been extended to cover Great Cairo & Alexandria. Perfect coverage Information Center, A very effective information center is created to provide medical information for patients, doctors, & pharmacists. El Ezaby ownes two companies. The first is Mutipharma; a distribution company and The Second company is Multi Apcy; a production company. Multipharma Company is one of the most promising Egyptian pharmaceutical projects. Multipharma is a private Egyptian Company acting as sole agent and distributor for a number of important multinational producers of pharmaceuticals, paramedical, laboratory and fine chemicals, dietetics, and cosmetics. Their trading activity includes importation and exportation. Multipharma has its own research center engaged in designing and formulating its own specialties, which are manufactured locally. The company has an extensive network of contacts within hospitals, pharmacies, most medical institutes in addition to beauty centers & superior supermarkets throughout Egypt and some Middle East markets. El Ezaby encountered with many challenges to move forward effectively due to fierce competition in the market. Today they have over 900 employees in30 outlets, 12 warehouses, & several other scientific offices. Their main objective is to have state of the art production facilities that the company can produce high quality pharmaceutical products, to cover the need
6
of the local market and to expand for the regional African, Arab, Europe countries and USA. The company is managed by a group of professionals whose qualifications are based on international pharmaceutical companies’ standards. Strategic Goal: To maintain its position as the Number one pharmacy chain in Egypt in terms of market share and goodwill. Mission: El Ezaby pharmacies strive to ensure excellent health care services to the public, Hospitals and Health Insurance Companies through out our outstanding branches all over Egypt. The Chain provides their customers with high quality pharmaceutical care & services, paramedical and cosmetic products. Services: All of their products are manufactured under strict quality assurance procedures including GLP, GSP, and validation protocols. El Ezaby, has it's our own manufacturing facility to fully automate its business. A complete network is to be applied between our sales branches scientific offices and pharmacy chain via Intranet Exerting our utmost effort in appointing highly qualified candidates and continuously develops their skills to adapt their sales team to market needs. Knowledge & Technology is the corner stone of their business in order to cope with computer systems to provide international standards. Accomplish their mission through technological leadership, product-oriented research, rapid product development, superior manufacturing and marketing strategies that create and reshape market. El Ezzaby Company is also engaged in distributing it's product to the following company:
7
8
Product Lines: The Following are the Product lines covered: 1. Solid Products (Tablets, Capsules & Powder) 2. Liquid (Syrup, Suspension and external liquids) 3. Creams & Ointments 4. Men's Products 5. Women's Product 6. Baby Products 7. Beauty Care 8. Skin Care 9. Hair Care 10. Nail Care 11.Cosmetics 12.Fragrance
Production Sector: The production department is located in Badr industrial zone, area over 14,000 square meters. The production site and warehouse currently occupy 8,000 square meters. The Production department specializes in producing a variety of pharmaceutical products that cover different medical & therapeutic needs. The products produced have a leading position in cardio-vascular, central nervous system, dermatology, etiology, allergy and ICU specialists. Chain Outlets: Today there are 30 pharmacies in Cairo, Alex, North coast & sharm. With capacity of about 900 employees, 2 warehouses. In the near future the chain will extend to cover the rest of major governorates. Geographical boundaries are overcome by opening a great chain of outlets to cover the needs of our customers wherever they are. Cairo City: Heliopolis Mohandessien Nasr City
9
Old Cairo El- Merryland El- Korba Haram Kornish Al-Nil Maadi Giza Alkasr Al Ainy El-Doky Ramsis Square Saray Mall El- Abbasia El-Manial Alexandria City: Green Plaza - Smooha. Moharam bek. Sidi Gaber 10th of Ramadan City North Coast Sharm El-Sheikh Mercato Mall - Hadabet Om ElSeed Al Khan
10
2. Seif Pharmacy Seif Pharmacy is the second largest pharmacy chain in Egypt. The pharmacy was founded in 1980 by Dr. Ashraf M. Hindam. Seif Pharmacy established its own private pharmacy in 1982.Seif Pharmacy was first originated from Seif Group, one of the leading investment corporations in the Egyptian market group. The group is divided into a management company and three retail activities. The management company has a strong ERP program that includes a very strong customer relationship management tool that supports their call center to service clients including a central purchasing system.Seif stores are a non- Pharmaceutical stores that sell health and wellness products. The stores are not less than 800 sq meters in size. It has successfully achieved high returns for the last twenty years and has diversified its activities by widening its investments to include cosmetics and perfumes. Today, Seif Pharmacy chain has 15 outlets in Egypt, targeting class A and B consumers. Dr. Ashraf Hindam is aiming at developing a chain for other categories in pharmacies of not more than 80 meters. The Chain will be developed through a management relationship with the owners of existing pharmacies, where the management company will also own the inventory. Moreover, Dr. Ashraf believes that there are potentials for inviting Private Equity into the Management firm inorder to establish the new brand.
Strategic Goal: Seif Pharmacy's main objective is to leaders in the health and beauty industry. In addition to raising consumers awareness and improving customers healthcare.
11
Product lines: The pharmacy offers wide range of products: Solid Products (Tablets, Capsules & Powder) Liquid (Syrup, Suspension and external liquids) Dental Care Items Beauty Products Foot Care Eye Care Skin CARE Nail Care Baby Products Hair Care Items Perfume Toys
Services: Providing High standards of customer care and support Supplying the finest quality of personal care items. Offering medical supplies, operating through wholesale and retail distribution. Specializes in the agency, Trade and distribution of cosmetics in Egypt. Provides a strong ERP program that offers a well Built customer relationship management supporting their call center and a central purchasing system to service their clients
12
Organizational Chart:
Chairman DR. Ashraf Hindam
Board Of Directors Dr. Tag El Deen Hassan
Departments
Marketing Manager Dr. Passant Ashraf
Financial Manager Dr. Manal Abd El Rauof
Research & Development Manager Dr. Tamer Mohammed Shaban
Management Manager Dr. Abeer Abd el Rady
13
Chain Outlets: In 2005, they have already reached 10 branches. Today there are about 15 branches in Egypt. Old Cairo (Main Outlet) Wahat Omar El Mohandessin Merghany St. Maadi Branch Kasr El-Ainy Maniel Shobra Master Rest House, Cairo-Alex Road Alharam Branch Nasr City Branch Damyetta Branch Heliopolis Roxy
14
3. Ali's Image Ali's Image, was founded by Dr. Youssry Abou El Olla. Ali's Image Pharmacy chain has a very long history, starting way back in the early seventies, when Ali Pharmacy opened in Safir Square. Ali's Image was collaborated with Ali & Ali chain after several challenging years. The pharmacy is known for it's outstanding reputation that has developed due to the availability of different drugs. Ali's Image management department manages chains of pharmacies through obvious missions, visions, and philosophy. It will also franchise other outlets through perfecting standers (0 Defects), and believing that there are no limits to perfectionism. Pharmacy Owners who have franchised with Ali's Image are guaranteed higher sales and higher profit through their reputable name and strategies, management, and customers. Ali's Image Pharmacy is planning to franchise all over Egypt, where every one can have access to Ali's Image. We intend to be number one customer care provider of Quality Services and Quality Product at best value. We will always be ahead of competition by our commitment to TQM and nation wide spread out. It is no longer just a pharmacy. It is an establishment for all possible health care products.
Mission: Satisfying their customer's needs, reducing overheads, and improving performance. In addition to offering Profitable, new products and services that are cost efficient developed faster than competitors in the market.
15
Departments: The following are the Different Departments operating in Ali's Image pharmacy chain: 1. Logistics Department: The logistics department consists of Store section, purchasing section, Material Planning section, Delivery section; the logistic department can efficiently purchase the right product (reasonable price/ market demand) with the optimum quantity based on stock control technique and deliver the order to each pharmacy during the hour based on top-notch software. 2. Human Resource Department: The Human Resources department performs high levels of recruiting, hiring, training and development of our associates to insure the family environment.
3. Financial Department Financial department consists of accounting, analysis and information sections. It delivers budgets/ROI studies, for all activities and products to achieve transparency and good decisionmaking. 4. Marketing Department: The Marketing Section consists of all business related categories, corporate, professional, and consumer. Each one has a separate department that reaches all categories within the pharmaceutical market, with continuous research and development to satisfy customer needs and creative wants.
16
Chain Outlets: Aly's image outlets are designed to serve our customers above their expectations. All the branches are consistent in all the services. Heliopolis - Safeer Square Nasr City - Adawea Square Mohandseen - Elhegaz St
17
Pharmacy 4. Ali & Ali Pharmacy: Ali & Ali pharmacy was first established in 1988. The Chairman of the chain is Ali & Ali Dr. Mostafa El Salamouny. Ali& Ali 1988 Chain own 9 outlets and have 2 under construction. Ali & Ali pharmacy was one of the first pharmacy Chains that have lunched in Egypt followed by El Ezaby and later Seif Pharmacy. Ali & Ali Pharmacy and Ali's image were business partners at one point, however after a tremendous success, both pharmacies decided to start their own separate pharmacy chains. Ali & Ali Pharmacy target consumer A, which is the reason why they don't have as many outlets as other pharmacies. They also had a chain outlet in Heliopolis, which was later taken over ownership control from Ali's image pharmacy. In spite of Inflation issues, that caused prices of products to increase from 30 % to 50%, Ali and Ali's prices are the same as any other pharmacy and has cheaper items than large supermarkets such as Metro. Furthermore, Ali and Ali pharmacy struggles with increasing their outlets was also due to the pharmaceutical law in Egypt that states each pharmacy must be at least 100 meters away from another chain pharmacy. Dr. Mostafa el Salamouny intends to separate the real estate assets from the management, as he is willing to create one and Invite Global through its Pharmacy Chain company to invest in it.
Mission: Providing high quality healthcare services in Egypt by professionals and caring staff. In addition to offering efficient services and cost-effective products.
18
Services: Delivery of quality services by health workers. Measuring Blood Pressure Weight measures Open 24 hours/ 7 days a week Free of Charge Delivery Services
Product line: Beauty Care Medicine Hair Care Dental Care Baby Products Men's Product Women's Product Herbal Products Cosmetics
Chain Outlets: Mohandiseen ( Main outlet) Abasya Asr El Ainee Harram Maadi
19
5. Misr Pharmacies Misr Pharmacies is equally owned by three partners; Dr. Mohammed Hussein, Dr. Mostafa Sherif and Dr. Mamdouh Amin. Misr Pharmacies owns 6 outlets; one of them is located in Upper Egypt and the Balance in Cairo. The Pharmacy is planning to establish 3 more branches that is contains a call center department. he company depends on IT to link all information between branches and the head office. They are willing to have investors buy I out as they need cash to grow. The pharmacy is between 50-80 sq.meters. Dr. Hussein is targeting class 'A' not 'A+' according to him pharmacies selling to the 'A+' sector can reach sales of up to 30,000 L.E. Per month. In his estimates and according to his experience Pharmacies cost around 150,000 L.E. To decorate premises of around 50-80 Sq. Meters. Misr Pharmacy believes that the most important issue is working near a real estate broker in order to find a suitable location. Dr. Hussein states that biggest barrier for growth in his opinion is cash availability.
Product lines: Solid Products (Tablets, Capsules & Powder) Liquid (Syrup, Suspension and external liquids) Dental Care Items Beauty Products Foot Care Eye Care Skin CARE Nail Care Baby Products Hair Care Items
20
Services: Misr Pharmacies has the first call center service agency in Egypt that is composed of a panel of qualified pharmacists including beauty experts to respond to any queries at any time. Misr Pharmacy has all types of locally and imported medicine A unified telephone number for customer support and home delivery. Measuring of blood pressure (Free of Charge). Weight Measure (Free of charge ) Diabetic Measure (Free of Charge) Measuring of skin temperature 24 hours/ 7 days a week service Free of charge delivery services
Chain Outlets: Mohandseen El Dokki Faisal Harram Down Town Nasr City Sohag Assyot
21
VII. Conclusion: Pharmacies in Egypt are looking ahead to a new era with a program called Pharmacy 2020, a consulting program designed to identify the challenges and drivers that affect pharmacists’ abilities to fulfill their potential as health care providers. The program removes barriers and identifies good practices in all areas of the profession through using this feedback to develop a strategy to take the profession forward. Today Pharmaceutical scientists are developing cutting edge research and drug development and discovery. Pharmacists have a growing responsibility to help people stay healthy by providing advice on and encouraging healthier lifestyles. Pharmacists are increasingly offering vital expert advice on areas such as nutrition, smoking, and weight management. There can be no doubt that pharmacy offers a challenging and rewarding career.
22