Qomel expects pharma plant to start production by year-end

Qomel Company’s CEO Hisham Alagla said that construction of the new pharmaceutical plant nears completion. Production is expected to begin by the end of 2025. The plant will focus on specialty pharmaceutical products that meet the needs of the Saudi market and add significant value to the company.

In an interview with Argaam, Alagla added that the H2 2024 results came in line with expectations, despite a 11.5% year-on-year (YoY) decline in net profit. This drop was attributed to zakat provisions related to the share premium, as well as higher operating expenses due to the company’s ongoing expansions, including the construction of the new pharmaceutical plant and the registration of additional medical products with the Saudi Food and Drug Authority (SFDA), which incurs associated registration costs.

Revenue grew by 7% in the second half of 2024, driven by improved demand for the company’s products and its expansion in the number of pharmaceutical products available in the market.

He pointed out that the profit margin improved to 36.6% compared to 34% in the first half, thanks to a pricing strategy focused on high-margin products, which helped offset part of the rising costs.

He added that the company follows a strategic approach in selecting its products, focusing on pharmaceuticals that witness growing market demand, particularly those supported by regulatory bodies such as SFDA and the Ministry of Health. This strategy helps reduce competition, generate better profit margins, and benefit from incentive initiatives provided by regulators.

Demand is expected to continue growing, as new marketing teams have been appointed to handle newly registered products. There is a strong upward trend in the number of pharmaceutical products the company provides in the market, which contributes to the continued increase in sales.

He noted that the new factory will boost the company’s production capacity. It is expected to focus on manufacturing specialized pharmaceutical products that meet the needs of the healthcare sector, with the potential for future expansion into other markets.

Qomel currently focuses on specific segments within the pharmaceutical market in the Kingdom, which limits its overall market share compared to the total market size. However, the company maintains strong presence in select medications.

Alagla highlighted that Qomel is working on expanding its presence in the private sector after previously focusing on government sales. He expects that new government policies, such as increasing the number of insured individuals, will drive demand for pharmaceuticals in the private sector, presenting a significant growth opportunity for the company.

Meanwhile, he affirmed that demand for pharmaceuticals in the Kingdom is continuously growing, according to analyst forecasts, which supports the company’s expansion plans.

Qomel aims to enhance its product offerings in the coming period, with a focus on treatments for chronic and incurable diseases.