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Cipla’s Ugandan Venture Plans to Invest $80 Million in Expansion Program

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Posted February 1, 2011 by Ugandan Diaspora News Team in Business ~ 2,026 views

     


By Fred Ojambo | Quality Chemicals Industries Ltd., a Ugandan pharmaceuticals manufacturer partly owned by India’s Cipla Ltd., said it plans to invest $80 million in two separate expansion programs over the next two years.

A $30 million project to expand capacity at Quality’s generic AIDS and malaria-drug plants in Kampala, the capital, will begin “soon,” Marketing Manager George Baguma said in a phone interview on Jan. 28. It will be followed by a $50 million investment in a new production line for pharmaceutical ingredients, he said. Baguma didn’t provide details on how much capacity would be expanded by.

Funding for the project will be raised from shareholders as well as through the sale of new stock, with plans to list on the domestic stock exchange at an unspecified future date, he said.

“We are just completing the design and soon plan to start on the second facility,” he said. “We have sold shares and even plan to sell more to raise more capital for bigger investments.”

The number of Ugandans infected with the HIV virus that causes AIDS has increased to 7.1 percent of the population from 6.1 percent five years ago, according to the Health Ministry. At least 300 people die in the country daily from malaria, according to Afro Alpine Pharma Ltd., a Ugandan pharmaceutical company.

The East African nation has about 442,000 people in need of generic AIDS drugs and only 218,900 have access to the treatment because of financial constraints, Uganda AIDSs Commission data shows. Quality Chemicals’ plant in Kampala has the capacity to produce 6 million malaria or generic AIDS tablets daily, with room for expansion, according to the company.

Shareholders

Ugandan shareholders and Cipla each own 41.8 percent of Quality Chemicals, while the remainder was sold last year to South Africa’s Capitalworks Investment Partners and U.K.-based private equity firm TLG Capital, Baguma said.

The expansion of the existing plant will target enhancing quality, quantity and competitiveness of the Quality Chemicals’ products, he said. The World Health Organization has cleared the plant to manufacture AIDS and anti-malarial generics, he said.

The company is completing registration of its products in neighboring Kenya, with plans to start exports in four months, Baguma said. Other regional countries as well as southern African countries are also being considered for exports, he said, without providing more details.

To contact the reporter on this story: Fred Ojambo in Kampala via Johannesburg at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.


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Ugandan Diaspora News Team

Ugandan Diaspora News Online is an independent, non political news portal primarily aimed at serving Ugandans who work and reside outside Uganda. Our aim is to be a one stop shop for everything Ugandan and the celebration of our Ugandan heritage.

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