According to the Bangladesh Association of Pharmaceutical Industries (BAPI), there has been an upward trend in the domestic market for pharmaceutical products over the past few years, and market size now stands at around Tk200 billion
Bangladesh is the only least developed country around the globe that meets up to 97% of its demand for pharmaceutical products, with a market size of nearly Tk200 billion, through local companies, policymakers and industry insiders have said.
In addition, Bangladeshi pharmaceutical products are being exported to 199 countries, and generated over $100 million in the last fiscal year.
Due to healthy earnings per share (EPS) and dividends, pharmaceutical stocks continue to attract both long-term and institutional investors.
The Pharmaceutical sector (including chemical producing firms) contributed 11.09% of the total turnover of the Dhaka Stock Exchange (DSE) in the last month, as compared to 10.95% in September, 7.66% in August, and 9.57% in July, according to data from the DSE.
Meanwhile, Export Promotion Bureau (EPB) data shows that pharmaceutical sector exports to 199 countries earned Bangladesh $103.46 million in the last fiscal year. In the July-September period of the current fiscal year, pharmaceutical product exports have already generated $30 million, up by 24.55% from the same period in FY18.
In FY17, pharmaceutical sector exports generated $89.17 million, the EPB said.
Md Asad Ullah, executive director and company secretary of Beximco Pharmaceuticals Limited, told the Dhaka Tribune: “Our country's pharmaceutical products are now being exported to 199 countries, including the USA. The demand for Bangladeshi pharmaceutical products in the global market is increasing, mainly due to product diversification and superb quality.”
“We have been doing well in the local market too, as many drug companies are expanding their production units to meet growing demand,” he added.
Asad further said stock market investors’ interest in the pharmaceutical sector is increasing as due to the high potential of the industry, and stocks of pharmaceutical companies are among the top choices for long-term investors.
According to the Bangladesh Association of Pharmaceutical Industries (BAPI), there has been an upward trend in the domestic market for pharmaceutical products over the past few years, and market size now stands at around Tk200 billion.
Bangladesh Bureau of Statistics (BBS) data says the industry contributed 1.85% of the GDP in FY17.
Regarding the success of local pharmaceutical firms, industry insiders said the sector is largely protected from the threat of foreign competitors, as there is a restriction on the import of drugs that are similar to locally manufactured variants.
The success of the sector has also generated a significant number of white collar jobs, they added.
Speaking to the Dhaka Tribune, stockholders of the sector said the local pharmaceutical industry has grown significantly over the last five years. From 2012 to 2017, the Compound Annual Growth Rate (CAGR) was 15%.
Out of 31 listed companies in the sector, 24 are listed in the category ‘A’, meaning the companies regularly provide dividends to shareholders. The remaining seven listed firms fall under the categories of B, N, and Z.
A recent study by LankaBangla Investment Ltd revealed that local players dominate Bangladesh's pharmaceutical market. The top ten companies hold 68.49% of market share, while the top twenty companies hold 86.33%.
Square Pharmaceuticals holds 17.73% of market share, while Incepta holds 10.21%, Beximco 8.39%, Opsonin 5.54%, Renata 4.97%, Healhtcare Pharma 4.57%, ACI 4.43%, Aristopharma 4.38%, Eskayef 4.36%, and Acme holds 3.91%, according to the study.
On the other hand, the shares in Pharmaceutical sector (including chemical companies) of the Dhaka Stock Exchange are becoming a growing attraction for investors, since most of the listed companies recently reported increased earnings per share (EPS), good dividends, and have sound market capitalization bases.
Former chairman of Bangladesh Securities and Exchange Commission (BSEC) Faruq Ahmad Siddiqi told the Dhaka Tribune: “The pharmaceutical market is growing day by day. Bangladeshi drug companies have also expanded outside the country. The profits of pharmaceutical companies have had a positive effect on investors.”
Other major sectors such as engineering, textiles, and power also reported significant turnover at the end of September, making up for 18.73%, 14.93%, and 17.10% of the monthly total transactions, respectively.
The listed pharmaceutical and chemicals sector companies are ACI Limited, ACI Formulations, The ACME Laboratories, Active Fine Chemicals, Advent Pharma, AFC Agro Biotech, Ambee Pharmaceuticals, Beacon Pharmaceuticals, Beximco Pharmaceuticals, Beximco Synthetics, Central Pharmaceuticals, Far Chemical Industries, Global Heavy Chemicals, GlaxoSmithKline (GSK) Bangladesh, The IBN SINA Pharmaceutical Industry, Indo-Bangla Pharmaceuticals, Imam Button Industries, JMI Syringes & Medical Devices, Keya Cosmetics, Kohinoor Chemicals, Libra Infusions, Marico Bangladesh, Orion Infusion, Orion Pharma, Pharma Aids, Reckitt Benckiser(Bd.), Renata Ltd, Salvo Chemical Industry, Silva Pharmaceuticals, Square Pharmaceuticals and Wata Chemicals Limited.
Square Pharmaceuticals, one of the leading pharmaceuticals companies, manufactures and markets various generic pharmaceuticals products, basic chemicals, and animal health products. Square Pharma has 4 subsidiary companies, according to the company’s profile.
Square Pharma enjoys the highest response from the buyers of pharmaceutical products, with 27 out of the top selling 100 pharmaceutical products being manufactured by them. The company has invested nearly Tk150 crore in the last five years, company sources said.
Square Pharmaceuticals contributed 1.80% of the total turnover in the pharmaceutical sector at the DSE last month, according to DSE sources.
Beximco Pharmaceuticals Limited, another leading pharmaceutical company, manufactures and markets generic pharmaceutical formulation products, including lifesaving intravenous fluids, therapeutic nutrition products, and active pharmaceutical ingredients. Beximco contributed 0.40% of total turnover in the pharmaceutical sector at the premier bourse last month.
Renata Limited is engaged in the manufacture and marketing of pharmaceuticals and animal health products. Renata has three subsidiaries, namely Renata Agro Industries Limited, Renata Oncology Limited, and Purnava Limited. Renata contributed 0.13% of total turnover in the pharmaceutical sector at DSE in October.
Active Fine Chemicals Limited is engaged in the manufacture of active pharmaceutical ingredients and various laboratory reagents. Currently, the company produces 25 active pharmaceutical ingredients and three types of laboratory reagents. Active Fine Chemicals contributed 2.51% of total turnover in the pharmaceutical sector at DSE in October.
Advanced chemical industries Limited (ACI) is also engaged in the manufacture and marketing of pharmaceuticals and animal health products. ACI has fourteen subsidiary companies, two joint ventures, and three associates. The company contributed 0.22% of total turnover in the pharmaceutical sector at the DES last month.
When contacted, a senior official of the World Trade Organization (WTO) Cell under the Ministry of Commerce said Bangladesh is the lone nation in the 45-LDC group of the WTO that exports pharmaceutical products and meets almost all of its local demand.
“The major reasons the sector is succeeding include exclusion of Bangladesh from the Regulations Of Intellectual Property Rights Act of the WTO, and backing from the government to help grow the local pharma industry,” the trade official said.