The pharmaceuticals sector in Bangladesh displayed the fastest growth in profit between 2015 and 2020 as more people, armed with rising purchasing power, afford more healthcare products.

The Dhaka Stock Exchange (DSE) has divided 384 listed companies into 22 sectors and its data showed that the pharmaceutical sector witnessed the highest profit growth during the period.

The five-year average profit growth of drug makers stood at 23 per cent. The food and allied sector came in second as it posted profit growth of 17 per cent, according to the data compiled by UCB Asset Management.

The average profit growth of the telecommunication sector was 12 per cent, while it stood at 6.31 per cent for the ceramic sector and 5 per cent for the banking sector.

Among the pharmaceutical companies in Bangladesh, 32 are listed with the DSE, including market leaders Square Pharmaceuticals, Beximco, Renata, Acme, ACI and Ibn Sina.

"As people's per capita income has risen and overall awareness has grown, people now consume more medicines," said M Mohibuz Zaman, chief operating officer of ACI Pharmaceuticals.

Per capita income in Bangladesh rose to $2,591 in the last fiscal year of 2020-21, almost doubling from $1,316 in 2014-15, data from the Bangladesh Bureau of Statistics (BBS) showed.

In the last decade, rural markets were the main growth driver of pharmaceuticals products, helped by the modernising agricultural sector and the government's huge development projects.

Remittance, sent by crores of migrant workers, has changed the economic landscape in the rural areas. As the income of rural households grew, people are spending more to access healthcare products.

"Its impact was visible in the profits of every industry, including the pharmaceuticals sector," Zaman added.

Per capita healthcare expenditure in Bangladesh nearly trebled to $41.9 from $15.8 in the last decade, according to the BBS.

The number of private healthcare facilities rose to 16,979 in 2021 from 3,536 in 2000.

When people's living standard rises, they increase their spending on medicines and lifestyle products, according to Jubayer Alam, company secretary of Renata.

"There was a time when people used to make delays while taking treatment because they could not afford it. Now, most of them access treatments rather quickly and take medicines."

The pharmaceutical sector, which meets 97 per cent of the local demand, witnessed a 12.1 per cent compound annual growth over the last five years. The market size was Tk 27,500 crore as of June 2021, according to a report of UCB.

Drugmakers are also making fresh investments as their sales are rising in the local and international markets, said Alam.

And in order to cater to the demand in overseas markets, the top pharmaceutical companies have upgraded their factories to international standards and are competing with global companies.

Medicine exports from Bangladesh rose three times in the last decade, fetching $169 million in the last fiscal year, according to the Export Promotion Bureau.

The booming poultry industry is also contributing to the sharpest profit growth of pharmaceuticals companies. The animal health industry is a Tk 3,000 crore market, with local drug makers holding 70 per cent of the market.

Shekh Mohammad Rashedul Hasan, managing director of UCB Asset Management, says people now take more health measures like regular checkups.

In Bangladesh, life expectancy has also risen. Since the number of elderly people is growing, they need more healthcare products as they live longer, he said.

"Our food habit is also causing higher medicine intake."

Among the listed pharmaceutical companies, Square Pharmaceuticals logged the highest profit of Tk 1,276 crore in 2019-20, followed by Renata Tk 412 crore and Beximco Pharmaceuticals Tk 354 crore.

Central Pharmaceuticals was the worst-performing medicine maker in the same fiscal year as it lost Tk 110 crore.

Madad Ali Virani, executive director of operations at Olympic Industries, one of the top food-processing companies in Bangladesh, says: "Higher sales have enabled higher profit growth. Our efficiency has also improved, so the sector's profits grew."

Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, says as the economy is expanding and the income of the people is rising, the domestic market-oriented sectors such as pharmaceuticals and food are faring well owing to a large local market. 

The profit of the tannery sector dropped the highest 55 per cent from 2015 to 2020, followed by a decline of 22 per cent for the textile sector and 7 per cent for the cement sector, according to data from UCB. 

The tannery sector has been going through difficulty for the last several years, and on many occasions, tanners found it difficult to sell leather and struggled to repay bank loans, Moazzem added.