February 5, 2012 / Standard on Sunday

Manufacturing: Beta Healthcare plans to increase its export markets to include West African countries

Regional drug maker targets wider African Market

Pharmaceutical products manufacturer Beta Healthcare plans to...Nike increase its export markets to include West African countries in its new two-prong expansion drive that also aims at increasing the number of products that the firm has in the market.

The company currently exports to Uganda, Tanzania, Ethiopia and the Democratic Republic of Congo. It also sells its drug manufactured at its Kenyan plant to Malawi and Zimbabwe.

It, however, plans to increase its markets to capture the belt running from East to West Africa and is currently finalizing plans to start sale of its products in Nigeria. It expects Nigeria to serve as a spring-board to the larger West Africa market.

The planned entry into new markets is part of a two-pronged expansion strategy adopted by the firm.

“We have taken a two pronged expansion strategy that will entail launch of new products and will entail launch of new products and also venture into virgin markets,” said Sanjay Advani Chief Executive Beta Healthcare Kenya.

“In regard to new markets, we are currently talking to drug authorities from several African countries that we would want to start selling our products to,” he said in an interview.

“Some of the authorities have already inspected our Nairobi plant and are in the process of finalizing entry plans into a number of new markets … We will soon venture into the West African markets.” Other markets that the firm plans to venture to include Sudan.

Dr. Advani said Beta Healthcare would in the course of this year introduce 13 new brands into Kenya.

“We are strengthening our product portfolio by introducing new niche products based on consumer research and introducing these into the markets where the company has gained ground,” he said.

He noted that introduction of new products would cushion the firm from instances of reduced consumer spending as has been the case in the recent past in Kenya. Harsh macro-economic environment has seen consumers significantly reduce their spending and pushed up production costs for manufacturers.

“Production costs have gone up but we have refrained from raising prices and instead taken the beating. But this is primarily the reason we are introducing a wider variety of products as well as going into new markets and going deeper into the markets where we have a foothold. This will ensure that our business is sustainable,” he said.

The firm is also planning to rope in as many customers as possible through the introduction of products targeted at the high and low income market segments.

“Most of the products that we are bringing to the market today are economical - some of them very affordable in comparison to what competitors have in the market by as much as 20 per cent. This however does not mean compromised quality,” said Advani.

The firm decried little assistance from government in terms of enacting legislation and policies that would propel pharmaceutical industry growth.

Other than the problems of poor infrastructure, expensive and unreliable power supply, that are common to all manufacturers that have made doing business in Kenya a difficult, Advani notes that there are bigger hurdles unique to the pharmaceutical industry.

He said government should put in place protectionist measures to facilitate growth for the industry as well as innovativeness.

“Most countries in Africa have a list of pharmaceutical products that cannot be exported there and this has given local industries in these countries room to grow. This in a big way gives incentives to industries to be innovative,” he said.

“Nigeria for instance has 80 products that cannot be exported to the country, which reflects the goodwill at the policy level to grow local industries. Tanzania also has a set of pharmaceutical products that we cannot export there and so do many other countries.”

“There are about 35 sizeable manufacturers in Kenya and of these only six are big manufacturers. It makes sense to protect local companies so as to grow them.”

Beta Healthcare’s mainstay is in over the counter brands such as Action, Maramoja, Salimia, Good Morning, Betasil and Zoom vitality pills. It recently launched Zoom condoms. The company is owned by Shelys Africa, which was in May 2008 acquired by Aspen.

Aspen now holds 60 per cent stake in Shelys Africa – which is the holding company for Beta Healthcare Kenya, Shelys pharmaceuticals Tanzania and Beta Healthcare Uganda.