SA to build R1.6bn pharmaceutical plant

13 February 2012

South Africa is to build a R1.6-billion pharmaceutical plant to produce the ingredients for antiretroviral medicines used in the treatment of HIV/Aids, the government announced on Friday.

The plant, which will be established near Pelindaba in Gauteng province, is a joint venture between the South African government, through Pelchem, and Swiss chemicals and biotechnology company Lonza Ltd.

“This joint venture, named ‘Ketlaphela’, will establish the first pharmaceutical plant to manufacture active pharmaceutical ingredients (APIs) for antiretroviral medicines in South Africa,” Science and Technology Minister Naledi Pandor told journalists in Cape Town.

Ketlaphela is a Sesotho word meaning “I will live or survive”.

Valuable and desirable partner

Pandor said the new company would be funded by a capital investment of R1-billion by various state institutions, including the Industrial Development Corporation; more than R500-million from Lonza; and R100-million from Pelchem, a subsidiary of the Nuclear Energy Corporation of SA.

“Our partnership with Lonza is based on the fact that Lonza is one of the world’s leading suppliers of various products of pharmaceutical, healthcare and life sciences industries and is a global leader in the production and support of APIs in cell-based research, endotoxin detection, and cell therapy manufacturing,” Pandor said.

“Lonza’s high Swiss standards plus their superb track record of establishing and maintaining successful commercial operations in developing countries, make them a valuable and desirable partner.”

South Africa currently imports the APIs needed to manufacture antiretrovirals.

Improving security of supply

Ketlaphela, once it starts up in 2016, is expected to significantly improve the security of supply of priority drugs, as well as stabilise the price of these.

While most antiretrovirals used in South Africa are locally manufactured by four companies, all the APIs used in them are imported.

The Ketlaphela project is expected to create an estimated 2 600 jobs.

Pandor said the construction process – which itself will create 3 800 jobs – would start early next year.

The government had created an interdepartmental task team “to negotiate the modalities and incentives necessary to ensure the financial viability of the Ketlaphela project”, she said.

Stepping up manufacturing capacity

Trade and Industry Minister Rob Davies said South Africa consumed R25-billion worth of medicines each year, the “majority” of this imported.

On the partnership with Lonza, Davies said an important aspect was that South Africa would also be producing the chemicals used to make the APIs. “It’s a rather significant step up in our capacity as pharmaceutical manufacturers,” he said.

Pandor indicated the saving South Africa might be expected to make through manufacturing its own APIs would be significant.

“We anticipate we’ll have about 40% localisation through the initiative,” she said.