Square Pharmaceuticals is going to invest $2.5 million to set up a subsidiary in the Philippines to grab a higher share of the country's drug market.
The subsidiary, Samson Pharma Inc is expected to begin its operations by April 2024, to market and distribute pharmaceutical products that are allowed in the Philippines, according to a stock exchange filing on Tuesday.
The board of Square Pharma said the subsidiary would be funded at a debt-equity ratio of 60:40, meaning 60 per cent or $ 1.5 million would come from debt financing - bank loans - while the remaining 40 per cent or $ 1 million would be invested from its own source.
Square Pharma, Bangladesh's largest drug maker that mainly caters to the domestic need, considers the Philippines as a potential export destination for it fulfills the demand for medicines largely through imports from different countries, including India.
Muhammad Zahangir Alam, chief financial officer of Square Pharma, said the Philippines met half of its medicine requirement through imports.
Of its total drug requirement, the Philippines imports 20 per cent from India. Ten companies from Bangladesh, including Square Pharma, have already been exporting medicines to the country, said Mr Alam.
"We have a full range of product offerings. We are opening the company in the Philippines so we can ensure optimum use of the business opportunities."
The subsidiary in the Philippines will not be the first overseas venture of Square Pharma. It set up a plant at an export processing zone in Nairobi, Kenya and began commercial manufacturing there in January this year.
Having seen the demand for its products rising, Square Pharma also signed a new deal for contract manufacturing with General Pharmaceuticals Dhaka, according to the Tuesday filing.
Earlier, the drug maker finalised several contracts with Aristopharma, Euro Pharma, Renata Oncology, and Apex Pharma not only to expand production but also introduce new products.
The drug manufacturer, which increased its market share to more than 20 per cent in FY23 from over 18 per cent a year ago in Bangladesh, seeks to further bolster its position in the domestic market.
Though Square Pharma's business mainly focuses on the local market, it has gained a foothold in the export market too, having supplied drugs to well-regulated markets, such as the US and the EU nations.
It started exporting medicines in 1987, and over time it has gained capacity to export antibiotics and other pharmaceutical products to more than 42 countries.
Meanwhile, the drug maker witnessed the highest-ever quarterly profit in July-September this year, driven by a spike in the demand for dengue-related drugs.
The company secured a consolidated profit of more than Tk 6 billion in the first quarter of FY24, a 9.10 per cent increase from the same quarter a year before.
Square Pharma, the flagship company of Square Group, also registered a 15 per cent year-on-year sales growth to Tk 18.46 billion in the quarter through September.
It made a record annual profit of around Tk 19 billion in FY23, driven by record sales. The board declared the highest-ever cash dividend of 105 per cent for FY23.
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