EIPICO’s Dr. Borhan El-Din Ismail: “I myself raised the pharmaceutical industry in the Middle East”

Interview with Dr. A. Borhan El-Din Ismail, Chairman and Executive Director of EIPICO (Egyptian International Pharmaceutical Industries Company)

First of all thank you for the interview. We’ll start with the evaluation of the pharmaceutical industry in Egypt.

The pharmaceutical industry in Egypt is very big. The local pharmaceutical industry covers 97% of consumption. Only 3% is covered by imports. Our industry has got about 30-35 thousand labourers. The capital value is about 30-40 billion Egyptian pounds. We are the first industry in the Middle East. We started the pharmaceutical industry in Egypt in 1962 and it increased to reach this percentage coverage of the local market- 97% of consumption. It’s about 36 billion Egyptian pounds of consumption in total. It is quite tempting for any company to trade or to buy in Egypt and every day we can see several companies or banks coming to buy from other companies in Egypt. This industry is still tempting and in Egypt it is quite promising. Even with the old problems you hear about – the economy and terrorism, our industry is increasing by 10% every year. This is a very high rate- in Europe it increases 3-5 % but ours is increasing by 10% every year. This is quite a good rate of increase. As an industry it is quite tempting for investors to come here for this business.

So you haven’t been affected by the political crisis in the past three years? The industry was still growing?

As I told you, even with all this, the increase of consumption will be 10% or 11%. Even before and after all these problems and troubles, the increase in consumption, production and selling in the pharmaceutical industry still increases at the same rate of about 10,11 or 12% per year.

What percentage of the local production is exported abroad?

Exportation is not easy. It needs strong companies to go abroad. I have to have an office and people as well. So due to our good fortune, we are the biggest company in the Middle East. Because of that I am exporting to 61 countries including England, Germany, Romania and to African and Arabian countries. My position in exportation is very good. We export to about 61 countries and every year or two years, we are still adding to the countries and places we can export to. But we are the biggest. Not every company in Egypt can do what we are doing. We are number one. Our exportation is 20% of our production but my target is 35%. Why 35%? 35% because I need foreign currency to import chemicals and machinery so I need 35% of my production to be exported. We have now reached about 20-23% and my final target is 35% of my production. Our production is about 1.6 billion Egyptian pounds.

How are you going to do it? Are you going to add more destinations or are you focusing on establishing a greater presence in these countries?

There are two sides – I am increasing my power in every place I’m in. For example, in England we started with 1 product, now we have 3 products. My aim is to increase my products where I am now, and expand into other countries every year in order to reach my target. Reaching 35% is very difficult – it’s not easy because we are going outside of the country. The pharmaceutical industry is the second strongest in the world after weapons. The multinationals are very, very strong abroad so when we go outside we face tremendous competition- it is not easy at all.

What do you do? Earlier you said you were the market leader? What is your advantage over other companies? What is it that is so special about yours? What differentiates you from other pharmaceutical companies?

Do you want me to speak about my company?

Of course.

Well from the first day I started I was the biggest. When you succeed it’s quite a problem because as you can see I am very old but I started this company in 1980. In 1995, I was number one in the Middle East and because of that I have to go abroad to prove that I am number one here and there. My name in the Middle East is very well known. My students were all over the Arabic area and America because one of my students was the vice president of Bristol-Mayers and another was the vice president of Astra in Sweden. These are two of my students from my previous company.

As we started big we have to keep going and in order to increase consumption and to progress we should export. As I told you, we have to import a lot of things for our use. I have to cover this cost with exports. If I succeed, I think I will reach the maximum that I want because my target is different to the targets of the multinationals. The multinationals want to expand but my main reason for exporting is to get foreign currency to address my need for foreign currency. When I reach my target for the local market as achieved by exporting, I will have reached the best position I want to put my company in.

So when you reach 35% you don’t want to expand anymore? That’s it?

By the way we are increasing exports by 20% every year. Locally it is 10-11% but we are increasing our exports by 20% every year.

I myself raised the pharmaceutical industry in the Middle East. I started very young – I was 32 and I was a chairman of a government company and I started the pharmaceutical industry here in Egypt in 1962, it was nothing at all. In terms of exportation our production was very local. The industry started here in the 1962. When I started I was 32 years old. I was the youngest of all of these presidents but I became the first on behalf of the government. When Mr Sadat made the new investment laws, I made a double investment between local government companies and the private sector. I was the first one to do it.

Some people started after me and made their own, but when I started I did it for my people- for the government. It was my ambition. I was number one from the 60s until now and I am still number one. I’m old but I will not stop. As I was telling you, we are expanding into the veterinary industry now as the veterinary industry needs us both locally and for exports. If you ask someone about my name in the pharmaceutical industry in the Middle East, they will know me. I set up this industry; in Iraq I built a factory down there. I have participated in anything to do with the pharmaceutical industry in the Middle East for about fifty years now, before you were born and before everybody was born.

Most of our competitors kept the market with a vision how to prove themselves in Egypt. It is a big market so they are competing in Egypt. Only now or a couple of years ago many of them have started to realise that Egypt is now satisfied. So what about the future? So now they have started to go and see the possibility of exporting. EIPICO started a long time before and was the first company to do so. We have expertise, we have our network and we have our products.

Where do you export to?

We are exporting to 61 countries, including England Germany and Romania, Africa and the Middle East, including Lebanon and Saudi Arabia.

You mentioned you have your own students practising here. I don’t know you probably have a partnership with local universities or how do you train your students? I know you also have a bio-technology centre so if you could talk about that?

Again we are the first in bio-technology. We have started it but it’s somewhat costly. We haven’t got any local industry in bio-technical engineering. So I’ve made a start and we are trying to send my people to train and co-operate with China or with any place where you can gain experience in bio-technical engineering. Now we have got two products on the market but they have not been exported yet. I want to expand this because this is the future of world medicine. The pharmaceutical industry is going to die out. We believe in bio-technology; because bio-technology depends on the body and the body trying to kill the disease. 

Now we have pharmaceuticals to kill the organism. But bio-technology increases the human resistance to these things. They can build cells for the heart, nowadays they are building cells for the nervous system. Until now, if the nervous system was cut or damaged the patient would experience problems. Nowadays, they have succeeded in using cells and bio-technology so that the spinal chord can be rebuilt. Bio-technology depends on the human body and what God has built in us. In broad terms this is bio-technology. It is very costly because you need tremendous amounts of money for it.

I will give you a simple example. You have no doubt heard of the Roche Company. It is one of the biggest multinationals. Roche was something like number 5 out of the pharmaceutical industries all over the world. Now it’s topped nearly 99% of our pharmaceutical production by using bio-technical engineering. They bought a laboratory and twelve top professors. I don’t know how many billions of Swiss francs it cost to build this laboratory. These twelve heads made Roche international as it is now number one in bio-technical engineering for cancer etc. From laboratories to production they are actively using their brains. This will be the future of the pharmaceutical industry but we are a small part of it.

And you are…?

Egypt, the Middle East, Russia, all over and not in China but in India. It needs a tremendous amount of money. These bio-technical engineering products are part of the main treatment for cancer. The price of these injections is 20 thousand dollars. Do the patients have this sort of money for an injection? 20 thousand dollars a week for his life. But this is a new kind of treatment. The new treatment will depend on bio-technical engineering.

I don’t teach people but we trained up my students who were working with me. We sent them all over the world to learn. By which time they were recruited by multinational companies to go over there. I didn’t train them specifically to send them abroad. They were my people which I trained for our work, but when they were trained up they were recruited by the Americans for their companies. These are the people who started with me in my old company whose name was Kahira and in the EIPICO company here.

Is there anything else you want to talk about?

Again if you want to speak about this point- when I started EIPICO in 1980, I built my company in a city called Tenth of Ramadan which is about 50km outside of Egypt. When we started, it was a desert. No one was eager to go outside but my company was number one in Tenth of Ramadan because I said I will go outside and they went. I built my factory down there and at the same time I built flats for our labourers, flats for the engineers, pharmacists and others. People bought these apartments for 25% of their salaries.

I managed the salaries. So when a worker asks for an apartment, there is no down payment. From the outset, I will get the payment from their salaries as the price of the flats has always been 22-23% of what they have been paid. When I started the number of people was such that I covered the costs.  I have 50 patients and I cover the treatment costs. The cost of treatment is very high- I have got 50 labourers. I cover all treatment for my labourers living here; I offer free transportation because I bring my labourers from all over Egypt to the factory for free. I will tell you a joke which happened in my company. The local meat, everyone likes the local meat. It is at a very high price. The imported meat is 30% of the price of the local meat as we haven’t got enough cattle. My labourers insist, as I feed them three times a week, that they have meat. They insist that they have local meat, otherwise they don’t eat. We are still now paying for local meat. At home 90% of people are using imported meat but when my labourers eat in my restaurants they have local meat. This was a joke because I said if you do not give us the local meat we shall not eat. I am compelled to give local meat to these people.

How many employees do you have?

We have got 4,500.

And how many factories?

I have got two for EIPICO and 1 for packaging and now we are buying one and abroad I am participating in a factory in Saudi Arabia and now I am building another factory in Khartoum.

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