Saudi Arabia: A Country Rich in More Than Oil

It’s no secret that Saudi Arabia is a country awash in oil, but the kingdom also possesses some lesser-known jewels as well. 

The nation’s medical device market was valued at $1.1 billion early last year and is estimated to reach a total of $1.6 billion by the end of 2018, suggesting a compound annual growth rate of 9 percent within the next five years, according to data from Research and Markets. The Saudi Arabian market accounts for nearly 50 percent of the Middle East’s medical devices industry.

Such projected growth of the kingdom’s medical device sector is attributed to several factors, including an overall increase in government healthcare spending, a rise in per capita income, growing penetration of healthcare insurance, and a substantial investment in both human resources and infrastructure, Research and Markets contends.

The Saudi government has undertaken several initiatives to improve the country’s existing healthcare industry and further develop its allied sectors. Many new specialties and super specialties facilities are being planned and introduced, which indirectly lead to upsurge in the demand of medical devices, equipments and services.

Domestic production of medical devices is very limited and restricted to very few items, which has plagued the industry since long and has made the sector highly imports driven. Imports are estimated to account for more than 80% of the overall market value and will continue to dominate in future due to limited production and small base of domestic manufacturers.

For many outsiders, Saudi Arabia remains an enigma. Few Western medical device manufacturers understand the culture and often skip over the nation to pursue other markets, but experts at Emergo Group contend there are good reasons to pay attention to this growing market.

For starters, there are shortages of hospital beds and healthcare resources in Saudi Arabia as compared to other markets of equal size. The Saudi government has said they want to double the number of hospital beds by 2015 — an ambitious goal but attainable nonetheless as the government has both the cash and willpower to make it happen.

Secondly, the Saudi royal family is spending billions of dollars on healthcare infrastructure because there is general dissatisfaction among the population with deteriorating standard of care. The government also sees what has occurred in Egypt, Tunisia, Libya, Syria and Bahrain, and wants to ensure discontent does not spread to Saudi Arabia.

That means for the near term, substantial investments will continue to be made in new medical equipment to outfit new public and private facilities, and presumably more ongoing demand as citizens have increasing access to healthcare. It remains to be seen whether that type of infrastructure investment will continue beyond 2015, Emergo Group experts note.

Saudi Arabia may have an uphill battle on its hands in becoming a Middle Eastern medical device powerhouse, but the combination of government investment, growing gross domestic product and a surging population will likely boost its chances of attaining that goal, Emergo representatives claim.