Egyptian Laboratory Study by Pjsurjit - Email-Surjitpj@

Laboratory
feasibility study
P.J.Surjit
Surjitpj@gmail.com
P.J.Surjit . Email-surjitpj@gmail.com
Sequence of the
presentation
Industry Description
Market Size
Customer Base
SWOT Analysis
Business Location
Five years of Financial Projections
Industry Description
Egypt's total pharmaceutical spending has been on a steady
rise, reaching a calculated US$2.47bn by the end of 2009
and forecast to be at US$4.25bn by 2014, increasing at a
respectable compound annual growth rate (CAGR) of 11.5%.
Egypt is improving its attractiveness for foreign direct

investment (FDI) in the pharmaceutical and healthcare
sector with a rejuvenation of political interest in the
healthcare industry.
Egyptian Pharmaceuticals and healthcare report Q2 2010
Market Size
The number of tests per capita in the MENA region is
currently far below international levels: in Egypt, the per
capita average is 2.5 laboratory tests per year. By
comparison, the per capita average is 16 tests per year in
Europe and 22 tests per year in the United States.
As the MENA region continues to experience strong economic

growth, greater penetration of health insurance, and
increased outsourcing by primary and secondary healthcare
providers, the level of laboratory testing is expected to
increase significantly.
Market Size
Egypt is characterized by a young, fast-growing population; As-

Salam s home market, where the company has its largest /reach
presence. The region, is also home to an increasingly significant
expatriate population and a growing per capital income.
Healthcare spending in Egypt is almost 6.1% of GDP and
expected it will continue 5.8 % in future.
Annual Economic growth of 5-7 %.
Healthcare Outlooks(Egypt)
2008 b 2009 c 2010 c 2011 c 2012 c 2013 c
Life expectancy, average
71.8 72.1 72.4 72.7 72.9 73.2
(years)
Life expectancy, male (years) 69.3 69.6 69.8 70.1 70.3 70.6
Life expectancy, female (years) 74.5 74.8 75.1 75.4 75.7 75.9
Infant mortality rate (per 1,000 live

28.4 27.3 26.2 25.2 24.2 23.3
births)
Healthcare spending (E bn) 51 59 68 78 88 101
Healthcare spending (% of GDP) 5.8 5.8 5.8 5.8 5.8 5.8
Healthcare spending (US$ m) 9,359 10,531 12,037 13,853 15,964 18,378

Healthcare spending (US$ per
121 134 150 169 191 216
head)
Healthcare (consumer expenditure;
2,454 2,860 3,258 3,774 4,401 5,118
US$ m)
Doctors (per 1,000 people) 2.1 2.1 2.1 2.1 2.0 2.0
Hospital beds (per 1,000

2.5 2.5 2.6 2.6 2.7 2.8
people)
Customer Base
Strategic Business Location
Matrix of the locations
Particulars Maadi Digla Katamay Heliopol Mohandase Nasr
a is en City
** ** * *** *** **
Public Transport
*
** ** *** * * *
Trafficking/Parki
ng
* *
** * * *** *** **
Shopping
*-good ,**-Very Good, ***-Out standing

*
** ** * *** ** **
Security
Competitors
EL Borg
Mukhatabar
Alfa
SWOT Analysis
Business Strategy
To align our ability to our market opportunity through
Place(Strategic business location)
Price
Promotion
Product
Total Investment/Source of
finance(in Mn)
Investment Details
Particulars Total in LE
Civil Work 623850
HIS-Computers 114900
Medical Equipment 90000

Furniture's 600000
Margin Money 500000
Contingency 36938
Total Project cost 1965688
Medical Equipment
Laboratory equipments Price QTY Total in LE
Refrigerator 2,000 6 12,000
Centrifuge 10,000 6 60,000
Microscope 3,000 6 18,000
Starting Expenses
Particulars Amount(LE)
Salary(1 Month) 92,000
GA Expenses(1 month) 17,143
Advertisement and publicity 200,000
Lease rent advance 75,000
Margin Money 103,158
Others 12,699
Total 500,000
Manpower details
Average
PRIMARY ADMINISTRATION Salary per No. of Staf
month
Cashier/Accountant/purchase 1
2,000
Marketing S. executive 1
5,000
Marketing executive 1
3,000
Marketing junior executive 1
2,000
Head of reception 1
2,500
Head of sampler 1
2,500
Manpower
Average Salary per
BRANCH ADMINISTRATION No. of Staf
month
Doctors 6
2,500
Sampler 12
1,000
Aid 12
500
HK Boys 12
500
Transporter 12
1,000
Receptionist 12
1,500
Security Guards 12
500
Revenue details(Volume)
SERVICE GROUP I II III IV V
Biochemistry 54,750 68,438 85,547 102,656 123,188
Hematology & Clinical Pathology 6,570 8,213 10,266 12,319 14,783
Microbiology 4,380 5,475 6,844 8,213 9,855
others 2,190 2,738 3,422 4,106 4,928
Histopathology 365 456 570 684 821
Sub-total 68255 85319 106648 127978 153574
Average test per day per branch 37 47 58 70 84
Revenue details-(pricing)
SERVICE GROUP I II III IV V
Biochemistry 40 44 48 53 59
Hematology & Clinical
40 44 48 53 59
Pathology
Microbiology 45 50 54 60 66
Hormone Assays 40 44 48 53 59
Histopathology 100 110 121 133 146
Revenue-(Value)
Service Group I II III IV V
3,011,25
Biochemistry 2,190,000 4,140,469 5,465,419 7,214,353
0
Hematology & Clinical Pathology 262,800 361,350 496,856 655,850 865,722
Microbiology 197,100 271,013 372,642 491,888 649,292
Hormone Assays 87,600 120,450 165,619 218,617 288,574
Histopathology 36,500 50,188 69,008 91,090 120,239

3,814,2 5,244,59
Sub-total 2,774,000 6,922,864 9,138,180
50 4
3,242,1 3,671,21
Revenue to ASSIHL 2,357,900 4,846,005 6,396,726
13 6
1,573,37
Revenue to central lab 416,100 572,138 2,076,859 2,741,454
8
Average income per month per
32,749 45,029 50,989 67,306 88,843
branch
We have consider revenue for 5 branch and keep one branch as buffer for risk analysis
Details of Overheads
TYPES I II III IV V
Electricity, Fuel 94316 129685 146849 193840 255869
Repairs and maintenance 23579 32421 36712 48460 63967
Printing and Stationery 23579 32421 36712 48460 63967
Postage and Telephones 14147 19453 22027 29076 38380
Advertising and Publicity 500000 500000 300000 200000 200000
Travel 23579 32421 36712 48460 63967
Insurance 2931 2728 2524 2321 2117
Rates & taxes 23579 32421 36712 48460 63967
Lease rent 300000 330000 363000 399300 439230

119146
TOTAL G & A 1005711 1111550 981249 1018377
6
CASH FLOW
CASH FLOW STATEMENT
PARTICULARS I II III IV V
SOURCE OF FUNDS
Net Cash Flow 11779 142834 240203 816076 1505548
Inc. Current Liabilities 4912 1842 894 2447 3231
Total 16692 144676 241097 818523 1508779

DISPOSITION OF FUNDS
Increase in fixed assets 0.000 0.000 0.000 0.000 0.000
Increase in Materials 9825 3684 1788 4895 6461
Increase in Sundry Debtors 98246 63860 21455 58739 77536
Tax 0 0 65179 276113
Total 108070 67544 23243 128813 360110
CASH FLOW
CASH FLOW STATEMENT I II III IV V
Opening balance 500000 408621 485753 703607 1393317
Surplus/Deficit -91379 77132 217854 689710 1148669
139331
Closing balance 408621 485753 703607 2541986
7
DSCR 1.04 1.43 1.66 2.88 3.80
DSCR 4.21
Balance Sheet
PROJECTED BALANCE SHEET
PARTICULARS I II III IV V
LIABILITIES
Equity 1965688 1965688 1965688 1965688 1965688
Equity Premium 0 0 0 0 0
Reserves & Surplus -89991 -48927 89506 738632 1866298
Term Loan 0 0 0 0 0
Bank Borrowings 0 0 0 0 0
Current Liabilities 4912 6754 7648 10096 13327
384531
1880609 1923515 2062841 2714416
Total 2
ASSETS
Fixed assets 1363917 1262147 1160377 1058606 956836
Current Assets 108070 175614 198858 262492 346489
Cash & Bank balance 408621 485753 703607 1393317 2541986
Prepaid expenses 0 0 0 0 0
384531
1880609 1923515 2062841 2714416
Total 2
Income Statement
Total Income 2357900 3242113 3671216 4846005 6396726
Salary 1104000 1656000 2070000 2484000 2980800
Total G & A 1005711 1111550 981249 1018377 1191466
Materials 117895 162106 183561 242300 319836
Professional Fees(2%) 47158 64842 73424 96920 127935
Fixed Management Fee (3% of top

70737 97263 110136 145380 191902
line excl. prof fees)
Total expenses 2345501 3091761 3418370 3986978 4811938
Operational Profit (PBIDT) 12399 150352 252845 859027 1584788
Variable Management Fee (5% of

operational profit)
620 7518 12642 42951 79239
Income |Statement
Cash Profit (PBDT) 11779 142834 240203 816076 1505548
Depreciation 101770 101770 101770 101770 101770
PBT -89991 41064 138433 714305 1403778
Net PBT -89991 41064 138433 714305 1403778
Cum profit -89991 -48927 89506 803811 2207589
Taxable income 0 0 0 325893 1380565
Tax 0 0 0 65179 276113
Net Profit (PAT) -89991 41064 138433 649127 1127665
Dividend (%) 0 0 0 0 0
Dividend 0 0 0 0 0
Reserves -89991 41064 138433 649127 1127665
Gross reserves -89991 -48927 89506 738632 1866298
Financial Indicators
Particulars I II III IV V
HR Cost(%) 47 51 56 51 47
PBIDT(%) 0.53 4.64 6.89 17.73 24.77
PAT(%) -3.82 1.27 3.77 13.40 17.63
NPV is Positive
IRR-41.18%
"Laboratory testing is critical to ensuring timely and accurate
treatment, providing physicians with an average 70 per cent of
all relevant patient information. The provision of such
information depends upon maintaining the latest technology
and equipment involved in laboratory diagnoses, as well as the
range of testing services,
THANK YOU FOR YOUR

ATTENTION!!!
QUESTIONS?

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Laboratory

Egypt is improving its attractiveness for foreign direct

Egyptian Pharmaceuticals and healthcare report Q2 2010

As the MENA region continues to experience strong economic

Egyptian Pharmaceuticals and healthcare report Q2 2010

Egypt is characterized by a young, fast-growing population; As-

Egyptian Pharmaceuticals and healthcare report Q2 2010

Infant mortality rate (per 1,000 live

Healthcare spending (E bn) 51 59 68 78 88 101

Healthcare spending (% of GDP) 5.8 5.8 5.8 5.8 5.8 5.8

Healthcare spending (US$ m) 9,359 10,531 12,037 13,853 15,964 18,378

Hospital beds (per 1,000

*-good ,**-Very Good, ***-Out standing

Civil Work 623850

Medical Equipment 90000

Margin Money 500000

Total Project cost 1965688

Laboratory equipments Price QTY Total in LE

Refrigerator 2,000 6 12,000

Centrifuge 10,000 6 60,000

Microscope 3,000 6 18,000

Biochemistry 54,750 68,438 85,547 102,656 123,188

Hematology & Clinical Pathology 6,570 8,213 10,266 12,319 14,783

Microbiology 4,380 5,475 6,844 8,213 9,855

others 2,190 2,738 3,422 4,106 4,928

Histopathology 365 456 570 684 821

Sub-total 68255 85319 106648 127978 153574

Average test per day per branch 37 47 58 70 84

Microbiology 197,100 271,013 372,642 491,888 649,292

Hormone Assays 87,600 120,450 165,619 218,617 288,574

Histopathology 36,500 50,188 69,008 91,090 120,239

Repairs and maintenance 23579 32421 36712 48460 63967

Printing and Stationery 23579 32421 36712 48460 63967

Postage and Telephones 14147 19453 22027 29076 38380

Advertising and Publicity 500000 500000 300000 200000 200000

Travel 23579 32421 36712 48460 63967

Insurance 2931 2728 2524 2321 2117

Rates & taxes 23579 32421 36712 48460 63967

Lease rent 300000 330000 363000 399300 439230

Net Cash Flow 11779 142834 240203 816076 1505548

Inc. Current Liabilities 4912 1842 894 2447 3231

Total 16692 144676 241097 818523 1508779

Increase in fixed assets 0.000 0.000 0.000 0.000 0.000

Increase in Materials 9825 3684 1788 4895 6461

Increase in Sundry Debtors 98246 63860 21455 58739 77536

Tax 0 0 65179 276113

Total 108070 67544 23243 128813 360110

Opening balance 500000 408621 485753 703607 1393317

Surplus/Deficit -91379 77132 217854 689710 1148669

DSCR 1.04 1.43 1.66 2.88 3.80

Salary 1104000 1656000 2070000 2484000 2980800

Total G & A 1005711 1111550 981249 1018377 1191466

Materials 117895 162106 183561 242300 319836

Professional Fees(2%) 47158 64842 73424 96920 127935

Fixed Management Fee (3% of top

Total expenses 2345501 3091761 3418370 3986978 4811938

Operational Profit (PBIDT) 12399 150352 252845 859027 1584788

Variable Management Fee (5% of

Depreciation 101770 101770 101770 101770 101770

PBT -89991 41064 138433 714305 1403778

Net PBT -89991 41064 138433 714305 1403778

Cum profit -89991 -48927 89506 803811 2207589

Taxable income 0 0 0 325893 1380565

-good ,-Very Good, -Out standing