GSK Expands Stake in Saudi Subsidiary
UK drugmaker GlaxoSmithKline (GSK) has expanded its stake in its Saudi subsidiary Glaxo Saudi Arabia Limited (GSAL) by 26% to 75%.
With an investment of more than $243 million, the company said it plans to lift production capacity at its Jeddah manufacturing site by 30% over the next three years, with more investments to follow up to 2020.
GSK said the expanded shareholding will give it the flexibility to invest in areas where it sees opportunities to further drive access and business performance.
Commenting on the company’s plans, Andrew Miles, vice president and general manager of operations in the Gulf Cooperation Council (GCC) states, said the share purchase represents a step toward strengthening operations in the Kingdom. Currently, 80% of the portfolio sold in the GCC is manufactured in Jeddah.
Miles added that GSK is a strong supporter of Saudi Arabia’s 2030 vision developed by Crown Prince Mohammed bin Salman to increase local manufacturing of products and diversify the economy.
Saudi Arabia is reportedly seeing growing interest from pharmaceutical companies in manufacturing in the Kingdom. French drugmaker Sanofi drugmaker was one of the pioneers, starting production at King Abdullah Economic City in in 2014. It currently exports throughout the Gulf.
Figures published by consultants GlobalData suggest that the pharmaceutical market in Saudi Arabia is poised to grow from $4.5 billion in 2015 to $6 billion by 2020.