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Saudi pharma firm to buy manufacturing site in Algeria

Jamjoon Pharmaceuticals raised $336 million in an initial public offering earlier this year Unsplash/Volodymyr Hryshchenko
Jamjoon Pharmaceuticals raised $336 million in an initial public offering earlier this year
  • Jamjoon increases investment in joint venture
  • Plant in Algiers produces tablets, capsules and powders
  • Saudi pharma industry worth $11.7bn

Jamjoom Pharmaceuticals Factory Company has increased capital in its joint venture in Algeria to help finance the acquisition of a manufacturing facility.

In a filing to the Saudi Stock Exchange, the company, which raised $336 million in an initial public offering in May, announced the additional funding in Jamjoom Algeria Lil Dawa, in which it owns 49 percent. 

The tie-up with Dawa Investment will create and issue 2.2 million new shares, with the capital increasing to $17.3 million.

The latest cash injection will partially fund the purchase of a site in Algiers, with an initial payment of $14 million. 

It will also finance the day-to-day factory operations, Jamjoon said in the filing, adding that it has invested $8 million with the remainder financed by a Shariah-compliant banking facility agreement between the joint venture and a bank in Algeria.

The factory produces a range of tablets, capsules and powders and is expected to begin operations immediately with the company seeing a financial impact from Q3 onwards.

Earlier this month, Jamjoom reported net profit of $22.5 million for the first quarter of 2023, up 94 percent compared to the previous year. 

The company generated revenue of $80.5 million in Q1, an increase of 24 percent on the back of strong demand for its products.

In May, Jamjoom’s IPO secured two cornerstone investors – Saudi Economic and Development Holding Co and Al Faisaliah Group – who subscribed for almost a quarter of the offering. 

The business develops, manufactures and markets a range of branded pharmaceutical products, with its main facility in Jeddah delivering 113 million units per year.

Analysts at BMI, formerly Fitch Solutions, expect pharmaceutical investment in Saudi Arabia to grow strongly, describing the market as an “attractive business landscape”.

The Saudi pharmaceutical industry was valued at $11.7 billion last year, according to BMI, and is estimated to grow annually at over 5 percent to $15.1 billion in 2027 and $19.8 billion in 2032.