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Confusion over SA, Swiss drugs deal

It was unclear if government had formed a R1.6bn deal with Swiss pharmaceutical giant Lonza to establish the manufacturing of critical drug components, as the company issued a statement saying that talks were still at an early stage.
Naledi Pandor (Image: GCIS)
On Friday, Science & Technology Minister Naledi Pandor, accompanied by Trade & Industry Minister Rob Davies, Economic Development Minister Ebrahim Patel, Health Minister Aaron Motsoaledi and Simon Edwards, a Lonza vice president, outlined the plans for the building of a factory.

However, after the press conference Lonza issued a statement from its Basel head office saying that while it confirmed discussions and negotiations were taking place with the SA government regarding the establishment of a local manufacturing facility for anti-retroviral medicines, nothing had yet been finalised.

"The discussions are still at an early stage and nothing has been signed," the Lonza statement said.

During the press conference Edwards said: "We (Lonza) are incredibly proud and honoured to be part of this project. We are looking forward to a long term involvement in this project and the long term success it will bring.

Ebrahim Patel (Image: GCIS)
"It is fantastic to see all the ministers here today as we have met with all of them over the past couple of years while we have been trying to get this project off the ground and this is the start of it today," he said.

Majority of drugs imported

Neither Edwards nor any of the government ministers was available to comment on the statement issued out of Switzerland that appeared to contradict Friday's press conference.

During the press conference Davies said that SA consumed R25bn worth of drugs a year, the majority of which were imported.

Rob Davies (Image: GCIS)
Motsoaledi said that it was a fact that SA was the largest market for antiretroviral drugs in the world and yet it paid the highest price because local suppliers said the active pharmaceutical ingredients (APIs) were not manufactured in this country.

The joint venture will be named "Ketlaphela", which is a Sesotho word meaning "I will live or survive".

Pandor said the factory would begin being built in 2013 and that production would begin by 2016.

The new pharmaceutical company will be created in partnership with Lonza and the SA state-owned company Pelchem, a subsidiary of the Nuclear Energy Corporation (NECSA).

(Aaron Motsoaledi (Image: GCIS)
The new company will be funded by a capital investment of R1bn by various state institutions including the Industrial Development Corporation; more than R500m from Lonza; and R100m from Pelchem/NECSA in land and infrastructure.

Davies said the ownership structure would be 70% South African with government owning 50% and Pelchem with 20%.

Pandor said state-owned company Pelchem was a leading speciality chemical manufacturer, and was the sole producer of fluorochemicals on the African continent.
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