By Denise Roland
29 Mar 2014
Drugmaker eyeing up sites in Ghana, Ethiopia and Rwanda for new facilities
GlaxoSmithKline is poised to announce a multimillion pound investment in Sub-Saharan Africa to step up its presence in the region, the Telegraph can reveal.
Britain’s biggest drugmaker will tomorrow unveil plans to build up to five new factories, creating hundreds of jobs.
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The company, which already manufactures drugs in Kenya, Nigeria and South Africa, is looking at sites in Ghana, Ethiopia and Rwanda for its new facilities.
Sir Andrew Witty, the chief executive, will make the announcement at the EU-Africa Business Summit in Brussels. He will also announce investment in research and development activities in Africa.
Sir Andrew, writing in the Telegraph, has underlined the importance of the region for GSK’s long-term business. “The transformation of Africa into a successful growth region is one area that we need to focus on,” he said. “There is a great opportunity for business to play a role, alongside governments and other agencies, to help deliver improved infrastructure and create prosperity to lift people out of poverty for good.”
GSK considers Africa to be at an economic “tipping point” and believes it will be one of the world’s most important growth drivers within 20 years.
GSK currently brings in around £500m in revenues from the Sub-Saharan region, a tiny fraction of its £26.5bn sales.
Sir Andrew said GSK had a “responsibility to use our scientific expertise and our global reach to develop innovative medicines and deliver them to people who need them around the world.”
He admitted many companies, including GSK, “haven’t always got it right”. He called for the private sector to use its “innovation, resources and reach to create prosperity, provide employment and deliver goods and services that people want and need.”
GSK’s sales model for much of Africa is based on volume rather than profit growth. For the countries that fall into its “least developed” category, the company sells its patented medicines for a quarter of the price they fetch in the UK. In 2013 it established a new unit dedicated to selling drugs in Sub-Saharan Africa, which it described in its annual report as “the first step in a broader growth strategy for Africa”.
The company also reinforced its presence in the continent last year by partnering with Save the Children to “save the lives of one million children” by broadening access to vaccines, investing in health workers, improving child nutrition and researching new medicines. Programmes have been launched in the Democratic Republic of Congo and Kenya.
GSK is also in the advanced stages of developing the world’s first malaria vaccine, which could make a “significant impact” on the health of millions of young children.
It has already committed to selling the vaccine on a not-for-profit basis, but has not yet disclosed how much it will cost to manufacture.