El Kendi Pharmaceutical Manufacturing Co.

El Kendi is part of our group of pharmaceutical companies and affiliates located in Jordan, Saudi Arabia and in Algeria.  This business is owned and run by the Sukhtia n family who are experienced in the pharmaceutical industry since the early 30s, they established United P harmaceuticals in Jordan which is selling today in Germany, and other EU markets and which is the approved local manufacturing site of GSK in the MENA region.  Secondly they established Tabuk Pharmaceuticals in Saudi Arabia, which is again already exporting to Europe and soon will get FDA approval.

The group penetrated the Algerian market during the nineties through United and Tabuk's products and when they felt that they have a good presence with a complete marketing and sales, logistics and regulatory affairs staff they decided to complete the value chain by establishing a manufacturing facility in Algeria for this market as well as the North African markets (El Kendi), needless to mention the advantages they will achieve being a local manufacturer in a huge demanding market like the Algerian.

Today El Kendi is expected to start local production in Algeria during late 2006, but we already have a number of products sold in this market as well as under final registration (kindly find attached a list of our current products, as for the products under registration we need to sign a confidentiality agreement to be able to share them with you). Products are sold under El Kendi's name with El Kendi's promotion and sales team.

Regarding El Kendi's sales force, there are 32 Medical Representatives, 4 Supervisors, 1 Hospital Coordinator and 2 Commercial Representatives, and by the end of May, 2006 another 4 Medical Representatives will have been trained and ready to join the sales force. This sales force covers all of the hospitals, private clinics and pharmacies in almost all of the geographical areas in Algeria; our current percentage of coverage is 70% and by the end of August it will be 100%.

It is important to mention that El Kendi has very good connections with the tender authorities, and has a partnership with the Central Pharmacy purchasing body (PCH)  in Algeria due to the nature of most of El Kendi's products "El Kendi has injectable cephalosrines and other injectable products including anesthetics like propofol, metronidazole, promethazine, ampicillin, amikacin and cyclophosphamide, and El Kendi wants to enlarge its hospital line to offer a complete set to the hospitals".

Total market size in Algeria is 1.6 billion dollars, this market is divided into private and tender markets; the private market (market size 1.0 billion dollars) and tender market (market size 0.58 billion dollars, growing at a rate 20% annually), the tender market is a huge one dominated by the Central Pharmacy purchasing body (PCH) which is the main supplier to the hospitals.

Pharmaceutical market is supplied with its needs by local manufacturing and importation; local manufacturing consists of Algerian manufacturers, and foreign manufacturers.