Healthcare Pharma going all out

Healthcare Pharmaceuticals Ltd (HPL) is going to invest about Tk 220 crore ($25.68 million) to establish large-scale active pharmaceutical ingredient (API) and formulation facilities to meet their growing demand in Bangladesh.

The company will produce API and formulated pharma products at the new manufacturing units to be established on 30 acres of land at the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) in Chattogram.

"We will establish the facilities to meet the local demand as import substitute and export finished products," Muhammad Halimuzzaman, deputy managing director and chief executive officer of HPL, told The Daily Star.

Under the project, three facilities will be set up on API, finished products and biotech and its formulation and around 900 jobs will be created.

Halimuzzaman said the company would install European equipment at the facilities to ensure manufacturing of high-quality products. He expects the unit to go into operation by 2022.

"We will take possession of the project site this month and development work will start immediately." 

HPL would finance the project through bank loans. 

Currently, HPL employs 3,700 people and it manufactures branded generic products for local and overseas markets in Asia, Africa and the Commonwealth of the Independent States, which comprise 12 countries.

The company started its journey in 1988 through the establishment of a company in association with Roche (Bangladesh) Ltd.

Until 2001, Healthcare was responsible for importing and distributing Roche products to the local market.

In 1996, HPL set up its pharmaceutical plant to produce the products instead of importing them from Roche, Switzerland and other local generic items for the domestic market. It now produces more than 200 products.

There are about 10 local companies, including Eskayef, Square, Beacon and Beximco, which produce API materials.

Local production can meet 5 to 6 per cent of the annual demand for the raw materials from the pharmaceutical sector, which has grown in recent years significantly.

Bangladesh spends about $1.3 billion each year to import APIs from the US, Taiwan, Italy, Germany, Spain, Switzerland, France and the UK.

"Our pharmaceutical sector will contribute to export diversification. Therefore, we always welcome API manufacturers to economic zones," said Paban Chowdhury, executive chairman of Bangladesh Economic Zones Authority (Beza).

HPL and the Beza signed the land-lease agreement in October 2018.

Chowdhury said HPL's investment would attract the pharmaceutical sector from home and abroad to invest in the zone.

A site has been set aside for pharmaceutical facilities so that they can use effluent treatment facilities to avoid the hassle of waste management.

"Securing more foreign direct investment for the country's Tk 22,000-crore pharmaceutical industry, particularly API manufacturing, is crucial to give a further boost to the sector," Chowdhury said.

About 98 per cent of the annual domestic demand for pharmaceutical products is met by local companies. Bangladesh also ships medicines to 144 countries.

Pharmaceutical exports rose 4.5 per cent year-on-year to $136 million in the last fiscal year.

The National Board of Revenue announced that imports of API products, pharmaceutical raw materials and reagents would receive VAT exemption until 2025 in a bid to give a boost to the sector.

However, the tax authorities imposed a condition on API producers that require them to spend at least 1 per cent of their annual turnover on research and development for them to avail the benefit. The minimum value-addition should be 60 per cent.