Integrated Report

Business unit review – Sub-Saharan Africa

Strengthening the African footprint

Aspen’s presence in SSA is represented through its subsidiary Shelys, the Collaboration and export of selected products into the region. Aspen supplies a portfolio of branded, generic, OTC and consumer products through a strong distribution platform.

Gross revenue   1 301     910   +43  
EBITA*   177     72   +145  
EBITA* margin   13,6%     7,9%    

Aspen cements its performance in Africa

The Group’s gross revenue in SSA advanced by 43% to R1,3 billion and EBITA* more than doubled, increasing from R72 million to R177 million. A full year’s contribution (prior year 7 months) from the Collaboration assisted in this substantial step-up in results. There was also an improved performance from Shelys in East Africa where margins improved.

Growing the private and exports market in East and Central Africa

The private market strategy for branded pharmaceutical products in Tanzania has gained traction following the implementation of marketing and promotional strategies to better align the commercial activities at Shelys with the Group’s objectives. This has resulted in significant year-on-year growth in branded products. The branded products business has gained further momentum through the extension of existing brands such as Diclopar and Malafin and the launch of new products including Rabep, Clotrisone and Dermacin.

The OTC business in Kenya continues to perform well with established brands such as Action and Mara Moja, while newer products such as Betasil lozenges and the recently introduced herbal product range are showing strong growth.

Export distribution channels have been expanded in the neighbouring East African countries and, as a result, sales growth was achieved in territories such as the Democratic Republic of Congo, Zambia and Malawi. Further expansion plans are earmarked for other East and Central African territories.

Shelys’ robust distribution network has been leveraged to successfully launch Aspen’s infant milk formula, Infacare, into Kenya, Uganda, Ethiopia and the Democratic Republic of Congo. Significant investment has been made in developing formulations and designing product packaging to meet the specific regulatory requirements unique to each territory into which these products are sold. Plans are in place to further expand the distribution of the Infacare brand in SSA.

The new manufacturing site in Kenya, commercialised in 2010, is fully operational and manufacturing efficiencies continue to be realised. The site is capable of producing pharmaceutical, OTC and consumer products. Selected products from the Aspen pipeline are currently being transferred for manufacture to the Nairobi site to supply the East African market.

Leading brands in SSA include:

  Product       Description  
  Action       For the treatment of acute headaches  
  Diclopar       For the treatment of pain and fever  
  Malafin       For the treatment of malaria  
  Mara Moja       For the treatment of general pain  
  Mucolyn       For the treatment of coughs and colds  

Collaboration progressing well

The Collaboration has performed well and sales representation is being increased to support the growing branded generics business. Some products from the Aspen pipeline have obtained regulatory approval and the Collaboration expects to launch its first new product in January 2012.

Synergies in the Collaboration will be realised as the Aspen products are added to the existing GSK product portfolio. In total, 224 products in the pipeline have been submitted for registration. Of these, 73 products are targeted for launch in Nigeria, Kenya and Ghana. Aspen’s pipeline offers products that are relevant to address the disease profiles in the SSA territories and are available at affordable prices to patients in this region.

Leading brands in the Collaboration include:

  Product       Description  
  Amoxil       For the treatment of bacterial infections  
  Augmentin       For the treatment of bacterial infections  
  Rotarix       For the prevention of rotavirus gastroenteritis in children  
  Seretide       For the treatment of asthma  
  Ventolyn       For the emergency treatment of asthma  
  Zantac       For the treatment and prevention of gastric ulcers  

* EBITA presents operating profit from continuing operations before amortisation adjusted for non-trading items as set out in the Segmental Analysis.