Afghanistan's pharmaceutical sector gets a boost from London investors

Sarah Spickernell
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The investors say political violence doesn't affect the day-to-day work of ordinary businesses (Source: Getty)
Afghanistan isn't known for its appeal to foreign investors, but one London-based private equity firm has seen its potential and poured money into a pharmaceutical company there.
InFrontier, which was set up specifically to look for investment opportunities in pre-emerging markets, has paid several hundred thousand pounds for a 40 per cent stake in 786 Pharmacy, a pharmaceutical chain which currently has eight stores in the capital Kabul.
According to the FT, the investors hope to increase this to 50 stores across the country by 2020, and turn it into the first western-style Afghan pharmacy chain offering high-quality medicines.
With a population of around 30m, Afghanistan has an estimated annual medicine consumption of £254m, but only two per cent of its medicines are produces domestically, with the majority being imported from India, China, and Korea.
InFrontier's decision to invest indicates the country's pharmaceutical industry could be on the brink of opening up more broadly for foreign investment after years of of economic decline and violence.
The firm's two founders, Felix von Schubert and Benj Conway, say this is possible because most of the violence we hear about is aimed at political targets and armed forces, rarely affecting the day to day life of ordinary citizens and business-owners.
They believe Afghanistan's market as “fertile” for foreign investment, with lots of young local entrepreneurs ready to take on tasks, and that this has been obscured by political unrest in the country.
“We want to show that Afghanistan is not a basket case,” said Von Schubert. “We’re aiming for a return on investment but we also want to make a social impact.”
It is the pair's second investment in the country, and comes after years of travelling to Afghanistan and holding discussions with entrepreneurs. 786 Pharmacy was founded by Zabu Ullah Hidayat, who is 29 with a family background in pharmaceuticals.

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