The South-African based
Cipla Medpro has joined hands with Cipla India as the two pharmaceutical
companies completed a deal valued at $500m (R5 billion), a significant foreign
direct investment into the country that will not only benefit all stakeholders,
but also promote opportunities both locally and throughout Africa, says Cipla
India CEO Subhanu Saxena, who was recently in South Africa to complete proceedings
at the company.
Saxena also met with key
stakeholders including the Medicines Control Council (MCC) Registrar Mandisa
Hela to further strengthen ties between the two countries.
“Cipla
India has 34 manufacturing facilities across India and manufactures more than
2,000 products in more than 50 therapeutic categories. With a turnover of
over US$1.4 billion, Cipla has a strong track record of partnering with local
businesses in over 150 countries.
“Our relationship with Cipla Medpro spans nearly two decades, and so the
time is right to combine our strengths. Together we will create a sustainable
pharmaceutical company able to compete effectively against multinational companies in a
rapidly changing pharmaceutical industry,” says Saxena.
A mutually-beneficial
agreement
Mark Sardi, joint deputy
CEO at Cipla Medpro, explains that the company will now be able to leverage
Cipla India’s expertise in the research and development (R&D) field,
especially with regards to the providing the healthcare industry around the
world with world-class ‘firsts’, including the revolutionary three-in-one
antiretroviral (ARV) medication for less than a dollar a day.
“Cipla Medpro can now
fully leverage Cipla India’s formidable strengths in R&D, managing
regulatory processes, and manufacturing. This allows us to increase access to
affordable healthcare for all South Africans by providing excellent service;
further broaden our product offering; and offer safe and effective medicines at
an affordable price,” says Sardi.
Sardi explains that
supplies from Cipla India currently account for approximately 85% of Cipla
Medpro’s business and closer integration across the value chain will benefit
both companies, as well as support the expansion of Cipla Medpro’s manufacturing
capability in Durban.
African expansion on the horizon
Saxena explains that the investment
is aimed at strengthening Cipla’s commitment to South Africa and the broader
African continent. “By leveraging the technology and existing structures of
both our companies, this will bring tangible benefits to consumers in South
Africa and, increasingly, the rest of Africa. The integrated business will
compete more effectively in the changing local and global pharmaceutical
environments, and as such there will be an increasing focus on key African
markets.”
Benefits to employees
According to Saxena,
employees at the company will benefit from being able to leverage the
intellectual capital and financial resources of the global Cipla organisation,
as well as leverage international career development opportunities.
“By creating a stronger,
more efficient global player, we will generate benefits for all stakeholders,
including staff. This offer is a huge compliment to the loyal employees of
Cipla Medpro, who ultimately represent the value within the company, and will
therefore experience the many advantages of being part of a global player.
“We therefore believe
that we will retain staff and continue to attract more people to the company,
in particular, highly skilled individuals,” says Saxena,
Saxena says that although Cipla
India is completing a 100% buyout of Cipla Medpro, Cipla India reognises the
importance of transformation in the country.
“Cipla India is committed to the
transformation principles of broad-based black economic empowerment (BBBEE) and
as such, will work closely with the Cipla Medpro management team to ensure that
the South African entity continues to meaningfully promote these principles as
part the investment into the country,” concludes Saxena.
