South Africa Plans Joint Venture for New API Plant

The South African government is involved in talks with the Swiss biopharmaceutical company Lonza regarding a joint venture to construct the country’s first plant to manufacture APIs for antiretroviral (ARV) medicines. The government is investing approximately 1.6 billion Rand ($206.6 million) in the joint venture, which will be called Ketlaphela, a Sesotho word that means “I will live or survive.”

In a statement, South Africa’s Minister of Science and Technology, Naledi Pandor, said that Lonza and Pelchem, a speciality chemical manufacturer and the sole producer of flourochemicals on the African continent, were involved in the joint venture. In a separate statement, Lonza confirmed that it was involved in negotiations, but emphasised that discussions were still at an early stage and that nothing had been signed.

More than 5.5 million people in South Africa live with HIV/AIDs and the country has the world’s largest ARV program, accounting for 20% of the global demand for ARVs by volume. A new government policy is expected to increase the number of patients taking ARVs from 1.9 million at the end of 2011 to approximately 3.5 million in 2016.

Most of the country’s medicines currently in use are manufactured by local pharmaceutical companies, but all of the APIs for ARV medicines are imported. The South African government hopes that the venture will reduce the country’s dependence on imports and mitigate its deficit, to which pharmaceuticals are the sixth largest contributor. The venture would also offer security of supply for priority drugs.

At the moment, the manufacturing plant is planned to be operational in 2016. It will be small scale and will be located in Pelindaba. In addition, the plant is expected to provide key support to small research companies and institutions in the country.

The government expects the plant to create 350 jobs in primary and secondary manufacturing, as well as an additional 1800 to 2250 sustainable indirect jobs. As much as 60% of the government’s 1.6-billion Rand ($206.6 million) investment will be spent on local procurement.