Ketlaphela: South Africa government's ARV manufacturing project enters next phase

Cabinet has approved a process to find new technology and investor partners in the Ketlaphela project, which aims to establish a government-controlled and fully integrated pharmaceutical company, focusing on the local manufacture of antiretrovirals (ARVs).

Ketlaphela is a joint venture of Pelchem Soc Ltd (Pelchem), the only fluorochemical company in the Southern Hemisphere, and the Industrial Development Corporation of South Africa Limited (IDC) the foremost development financier in South Africa.

The process will begin with the publishing of a request for information for qualification from potential local and/or international technology and investment partners for Ketlaphela.

This step is necessary after Lonza, one of the initial consortium members and technology partner, recently withdrew from the consortium in line with their new management team's global "Focus and Deliver" strategy.

Ketlaphela is expected to become the nucleus for a modern pharmaceutical manufacturing industry cluster and enable the local production of medicines in future by providing the platform for the development of the necessary manufacturing and technology infrastructure and, more importantly, the skills and knowledge base required.

The project is in line with government's plans to address HIV and Aids with a domestic solution. It is estimated that more than 2,5 million South Africans living with HIV will need ARVs by 2015.

The South African government is a significant customer in the local pharmaceuticals market, accounting for an estimated 70% by volume of the total sales in the sector. Although some of these products are locally formulated, all of the active pharmaceutical ingredients (APIs) used in the formulations, with a few exceptions, are imported. Therefore, skills transfer, modern and green technology, multiproduct capabilities for the desired APIs and contributing a significant portion of the capital will be key considerations in the selection of partners.

The project's goals of addressing the country's burden of disease, job creation and contributing towards the trade deficit in the pharmaceutical sector will continue to be supported by government through various grants and incentive programmes.

The Department of Science and Technology is leading the process, in conjunction with the Departments of Trade and Industry, Health, Economic Development, and Energy, as well as National Treasury.

With Ketlaphela, the country will establish local manufacturing capacities, including skills for the development of the active ingredients of the most needed drugs and to support the critical requirement of having national in-house production.

Listed as a priority in the latest iteration of government's Industrial Policy and Action Plan, it will ensure security of supply to target the country's burden of disease, subsequently expanding into Southern Africa. Subsequent phases will focus on other communicable and non-communicable diseases.

Expected to be constructed at Pelindaba, the project should create more than 1 600 direct and indirect jobs and reduce the country's R15 billion pharmaceutical trade deficit by 10%. It is expected to be operational in 2017.

The request for information for qualification will be made available to solicit new local and international technology and investment partners to contribute capital and technology for producing the targeted APIs for the ARV treatment programme, as well as technology to produce the new fixed-dose combination tablets recently launched by the Department of Health. Both the IDC and Pelchem are confident that suitable technology partners willing to invest in the project will be identified within a relatively short period.

For further information, contact:
Tommy Makhode
Department of Science and Technology
Chief Director: Science Communication
Cell: 082 379 8268
E-mail: tommy.makhode@dst.gov.za

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