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Established in 2001, Ibnsina Pharma is Egypt’s fastest-growing and second-largest pharmaceutical distributor. The company distributes a competitive portfolio of pharmaceutical products from over 350 Egyptian and multinational companies to more than 35,000 customers including pharmacies, hospitals, retail outlets, and wholesalers. Its nationwide distribution network with 55 operational sites, including distribution hubs and central warehouses, is supported by a fleet of c. 600 vehicles.
With a market share of 18.8% as of September 2017, the company is a pioneer in introducing value-added services for its customers including telesales, same-day-delivery, and creative commercial activities, in addition to third-party logistics services.
Ibnsina Pharma’s core function is the distribution of pharmaceutical and personal care products from hundreds of manufacturers and suppliers to pharmacies and hospitals nationwide through its fleet of over 600 vehicles. Its nationwide distribution network, with 55 operational sites, includes distribution hubs and central warehouses, guaranteeing the safe storage and delivery of temperature-sensitive products. The company also has a highly efficient order-taking and delivery system, having pioneered the use of a telesales order-taking model in the industry.
Warehousing and Logistics
Ibnsina Pharma’s extensive experience as a pharmaceutical distributor allows it to manage the responsibility of warehousing and logistics for suppliers to help them achieve their productivity goals. Its state-of-the-art warehouses manage customer storage capacities, and with the help of its temperature-controlled supply chain, the company’s warehouses and delivery fleet comply with good storage practices (GSP) and good distribution practices (GDP) established by the World Health Organization.
Importation and Packaging
In recent years, Ibnsina Pharma expanded its portfolio and became an importer of various nutrition products and medical devices from multinational organizations and major pharmaceutical companies worldwide. The team is constantly pursuing new partnerships with reputable international suppliers to further meet demand in the Egyptian pharmaceuticals market and ensure that people have access to safe, high-quality products they need to thrive.
Ibnsina Pharma provides clients with an unparalleled customer care system through a dedicated CRM system that ensures every client need, complaint, or concern is addressed. In addition, it provides suppliers with ancillary support through a sales team dedicated to understanding their needs, target clients with specific promotions, and launch new products. Meanwhile, the marketing team analyzes the pharmaceuticals market to examine IMS reports, perform continuous internal analysis, and conduct nationwide surveys to collect data and produce action plans tailored to meet customers’ and suppliers’ specific goals and needs.
Ibnsina Pharma supplies pharmaceuticals and personal care products to more than 35,000 private- and public-sector customers, including retail chains, independent pharmacies, wholesalers, and healthcare institutions through active participation in tenders. It relies on a highly efficient supply chain management system to deliver over 375,000 drops each month.
The company sources a comprehensive portfolio of pharmaceutical and personal care products from over 325 multinational and local pharmaceutical suppliers. Its teams coordinate with suppliers at every stage of developing commercial offers including planning, design, distribution, and follow-up analysis. Ibnsina Pharma works diligently to realize suppliers’ desired strategies, meet all objectives and sales targets, and successfully position co-promoted products against those of competing brands.
Ibnsina Pharma was established in 2001 as a pharmaceutical distribution company under the name Ibnsina Laborex Pharma by a group of Egyptian investors in cooperation with the French Eurapharma Group. In 2006, the company’s Egyptian partners acquired 100% of its shares, leading to its rebranding as Ibnsina Pharma.
In 2009, the company turned its sights on expansion, making significant investments to add 15 distribution centers and five offices by 2012 as it embarked on a journey to enhance efficiency through standardizing operational processes.
The European Bank for Reconstruction and Development (EBRD) became a minority shareholder in 2015, acquiring a 21% stake through primary and secondary share transactions during the year.
The company's growth drive continued in 2017 with its intention to proceed with an initial public offering on the Egyptian Exchange, offering up 38% of its shares on its road to becoming a publically traded company.
As of September 2017, Ibnsina Pharma has grown its market share to 18.8%, and its growth has more than doubled that of the market for the last five years, with a CAGR in revenues of 31% compared to an industry CAGR of 17%.
Ibnsina Pharma is the second-largest pharmaceutical distribution company in Egypt and the country’s fastest growing. Its success is anchored by a collective decision-making strategy and decentralized approach to management, both of which have been built on the solid foundations of its people. The company is a firm believer that realizing a business strategy is the responsibility of everyone in the organization, which is why it relies heavily on key information and market intelligence to drive its strategic objectives forward. Its leadership in the market hinges on the strength of its internal structure and its effectiveness in seeing through the company’s three-axis strategy: strengthening its core business, value-based differentiation, and diversifying revenue streams.
Strengthening Its Core Business
Ibnsina Pharma is committed to solidifying and growing its legacy pharmaceutical distribution business through building a highly efficient supply chain and utilizing advanced technologies to provide the highest standard of services to clients. Its competitive advantage over new entrants is exemplified in its economies of scale, with over 9,500 SKUs, 35,000 customers, c.600 distribution vehicles, and a 5,500-person strong team.
Ibnsina Pharma seeks to establish sustainable, value-based differentiation in the market as it focuses resource allocation to maximize value. It funnels considerable time, energy, and manpower to providing its highest-value clients with a comprehensive portfolio of services beyond its core business of distribution. This has allowed the company to grow considerably faster than competitors as it delivers every day on a high volume of transactions for a large number of suppliers and end consumers. As such, Ibnsina Pharma’s growth has outpaced the market by over twofold for the last five years, with a CAGR in revenues of 31% compared to an industry CAGR of 17%.
Diversifying Revenue Streams
Because Ibnsina Pharma believes diversified revenue streams largely mitigate risk for any organization, the company has built up a solid, well rounded foundation to give it the know-how, assets, systems, and ability to handle complex operations that can be leveraged across industries. Its highly efficient supply chain, expansive distribution network, and third-party logistics activities (warehousing, transportation, overprinting, relabeling, and repackaging) will allow it to reap long-term benefits from the expansion into higher-margin, diversified revenue streams.
Healthcare is a highly defensive sector in Egypt with significant room for continued growth driven by recent regulatory reforms, increasing incidence of chronic disease, and a surge in generic uptake. Egypt also has a growing middle class with higher healthcare awareness and slowly burgeoning disposable income. In addition, the population, which is poised to hit 102 million by 2021, is increasingly aging, with the number of people over 65 years expected to increase to 8.1% of the total population by 2020. All of these factors perfectly position Egypt as the largest and most attractive healthcare market in the region, with a healthcare expenditure CAGR of 12% in 2013-2017.
Health Expenditure CAGR 2013-2017
Industry growth is also largely driven by the pharmaceuticals market given the under-penetration of healthcare insurance that force out-of-pocket sales of pharmaceutical products, with pharmaceutical sales having grown to EGP 41 billion in 2016 — a CAGR of 17%
Pharmaceutical Sales (EGP bn)
Compounding matters is the retail price surge for pharmaceutical product in the wake of the November 2016 float of the Egyptian pound. The retail prices of over 3,000 SKUs rose 30-50% in 2016 and medications costing less than EGP 30 saw a 20% rise in 2017 due to increased input and production costs. This in addition to a steady increase in the number of pharmacies over the past five years means a wider customer base and higher returns for pharmaceutical distributors like Ibnsina Pharma.
Total Number of Pharmacies, Egypt (‘000)
Ibnsina Pharma has reaped the considerable benefits of this market landscape by leveraging its nationwide geographical coverage, operational efficiency driven by an unparalleled supply chain processes, and multi-site operations with highly diversified supplier/client base. Coupled with its highly experienced management team and backed both by notable institutional shareholders and an exceptional team of 5,500 employees, Ibnsina Pharma holds a leading position in the market.*Source: IMS Health, BMI, WHO