Medtech Ethiopia has signaled its intentions in recent years through various acquisitions and diversifications, and is well on its way to benefiting from its most significant investment to date.
The Ethiopian pharmaceutical company’s recent acquisition of EPHARM (Ethiopian Pharmaceuticals Manufacturing Factory) signals a full circle in the business’s 16-year development, which initially saw it operate as a distributor for the latter to fill the demand gap in Ethiopia.
Founder and Chief Executive Officer (CEO), Dr. Mohammed Nuri was the innovator who noticed the concerning trend and has not looked back since deciding to form the country’s first pharmaceutical supplier.
“I am a doctor by background, and was really frustrated by the shortage of availability of pharmaceutical products in the country,” he said. “This is what pushed me to go into this field and with the Ethiopian market untested at the time, we grew exponentially.
“From five staff members in a three room office, with capital of $50,000, we have now registered more than 300 pharmaceutical products from more than 20 global suppliers, and we are ISO certified and one of the top pharmaceutical companies in Ethiopia.”
EPHARM acquisition
EPHARM has been a government-owned organisation for the past 50 years, establishing an unrivalled reputation in the country and industry, making the acquisition a vital feather in the cap of Medtech Ethiopia.
With a total of 63,000 square meters of land to expand the EPHARM facilities, Dr. Nuri has taken the opportunity to make sure that the potential of this venture is optimised.
“EPHARM has eight manufacturing lines for various products and we will be renovating each one in turn over the next five years to make sure they meet GMP (Good Manufacturing Practice) guidelines before making them fully operational,” the CEO explained. “Any machinery that needs changing we will change, and any that needs upgrading, we will upgrade; all the while maintaining the existing employees and giving them the relevant upgrades in training.”
Alongside the physical assets of the renovations and inherited product lines, the retention of the 500 staff members and identity that EPHARM has within the country is seen as pivotal to the success Dr. Nuri expects from the acquisition, while the operational improvements that have begun are already receiving international input and recognition via the likes of Bosch, in regards to the installation and training involved with new machinery.
The end result will see EPHARM’s facilities globally competitive, and subsequently continue carrying the flag for the industry in Ethiopia.
Joint venture
Collaborations, acquisitions and partnerships – both domestic and international – have been key features of Medtech Ethiopia’s vast expansion over the past 16 years.
The company now consists of four business unit; pharmaceuticals, medical supplies, life-care and general trading. The first comprised a large portion of the company’s early successes, relying on key partnerships in India and the Middle East to provide as many market-leading products as possible to Ethiopia.
The aim now, however, is to capitalise on Ethiopia’s general economic growth and to become the hub for manufacturing and distribution locally.
To aid this slow, but concerted transition away from imports, Medtech Ethiopia has recently embarked on a joint venture with one of the UAE’s giant pharmaceutical companies, Julphar, as Dr. Nuri explained: “We signed an exclusive agreement with Julphar 12 years back, registering certain products from this company and in 2012 we signed a joint venture agreement with them on a state-of-the-art pharmaceutical manufacturing factory here in Ethiopia called Julphar Ethiopia PLC.
“This factory was inaugurated by our Prime Minister and has received big public approval.”
With three production lines and 100 employees introduced as a result of the venture, the immediate success of the partnership has subsequently led to a further proposal which will see Julphar Ethiopia open up the country’s first insulin factory.
Work will begin on the factory by 2015 and, once completed, will not only become a massive benchmark for availability of insulin in Ethiopia, but will ultimately become a hub for the entire continent.
Corporate Social Responsibility
Being a pioneer from a business sense is very important to Medtech Ethiopia, but being a positive influence in the country outside of its profit-making activities is every bit, if not more significant.
For the past 10 years the company has donated three percent of its net income to be distributed around the country to worthy causes, as part of its widespread Corporate Social Responsibility (CSR) programme.
“This money goes to the poor and needy and we currently have 10 non-governmental organisations and charities that we regularly support, including work with the blind, providing spring water for 30,000 people in 13 rural areas and supporting rural elementary & secondary schools and two autistic centres,” Dr. Nuri said.
“We also work in association with the local university to provide scholarships for young students and are also very much involved in making sure that our manufacturing practices preserve the environment as best as possible.”
Once the EPHARM renovation has been completed, the business even has plans to open its own charity foundation, providing further aid to people unable to provide for themselves.
Vision 2020
As a result of the company’s recent acquisitions and subsequently successful expansion plans, Medtech Ethiopia has had to revise its initial 2020 vision, with the target now to become one of the top businesses in the country.
This refers not just to the pharmaceutical sector, but across all businesses, leading to even further efforts to diversify and expand its offering at present.
Dr. Nuri explained: “We currently import and distribute products in baby nutrition like Danone-Bebelac, as well as being an agent for companies like Procter & Gamble.
“We have also just begun running a big ceramic factory in a joint venture with a world class ceramic manufacturer. This factory in Ethiopia will be upgraded over the next nine months to become the biggest for ceramics in the country.”
Adding to this repertoire exists the company’s animal exporting business from its tailor-made export house, which led the company to be named as best cattle exporter in the country five years ago; all of which, Dr. Nuri believes, will conspire to make sure Medtech Ethiopia becomes one of the top three business groups in Ethiopia by 2020.
“Medtech Ethiopia is an ethical and highly professional company, proud of itself here and abroad as a reliable and admired business partner,” he concluded.
“We have set a new vision of being a top three business group by 2020 while strengthening our CSR programme by truly supporting the needy across the country.”