Cape Town - The South African government has entered into a massive partnership with a leading global pharmaceutical company to manufacture the ingredients of Anti-Retroviral (ARV) drugs locally.
South Africa is the largest consumer of ARVs in the world and spends R4.2 billion a year on buying the drugs. The partnership will see the country spending less.
Making the announcement on Friday, Science and Technology Minister Naledi Pandor said government had entered into a partnership with Lonza Limited through the state-owned specialty chemical manufacturer, Pelchem Private Limited.
The venture - to be called Ketlaphela - will manufacture Active Pharmaceutical Ingredients, which account for about 75 percent in the making of generic ARVs. Government will have a 50 percent stake, Lonza Limited a 30 percent stake and Pelchem Private Limited will take the remaining 20 percent, Pandor said.
"The project is in line with the plans of the South African government to address HIV and Aids through the local and cost effective production of antiretroviral drugs.
"Ketlaphela will leapfrog South Africa into the 21st century as far as local manufacturing is concerned. It will also provide new opportunities for South African scientists and pharmaceutical companies."
The minister said the company will be funded by capital investments of R1 billion by various state institutions, including the Industrial Development Corporation.
Lonza Limited is set to invest R500 million and Pelchem will set aside R100 million for the project. The total investment for the company is projected to be R1.6 billion.
Pandor said the company, set to be constructed at the Pelindaba site of Pelchem in Gauteng, will boost the local pharmaceutical industry by creating an estimated 22 000 jobs.
The jobs, she said, will include both direct and indirect ones in the formal and informal sectors of the economy.
During the construction phase alone, 3 800 jobs are expected to be created.
"An interdepartmental task team comprising the Departments of Science and Technology, Trade and Industry, Economic Development, Health and Energy has been established to negotiate the modalities and incentives necessary to ensure the financial viability of the Ketlaphela project," she said.
Pandor said she will be the one guiding the task team.
The start of the construction of the project has been set for 2013 and the company is expected to start producing ARVs by 2016.
The minister was accompanied by various ministers with a direct interest in the project.
