Chinese drug makers seek to invest in E African market

What you need to know:

Over 20 Chinese pharmaceutical manufacturers are in Kenya seeking to benefit from rising demand for drugs and equipment
The Chinese firms said they are looking to invest in new manufacturing plants and to forge distribution partnerships with local players.
Chinese official: "Cheap drugs in complete categories are better choices for the people in East African countries, and can help to cut down the national expenditure for healthcare"
Some of the Chinese companies eyeing new opportunities in the region are Beijing Tongretang Technologies which makes both traditional and modern drugs and China Sunshine, an exporter of drugs, laboratory supplies, dental products and surgical instruments. Others are China Sinopharm International Corporation, Farmasino Pharmaceuticals.
Most of the drugs consumed in the EAC market (55 per cent) are procured by governments while the private sector supplies 45 per cent.

More than 20 Chinese pharmaceutical manufacturers are in Kenya, seeking to benefit from rising demand for drugs and equipment in the East African market.

The Chinese firms said they are looking to invest in new manufacturing plants and to forge distribution partnerships with local players.

“Chinese firms are here to benefit from the growing drug market, either through joint ventures and even setting drug manufacturing plants,” said Zhang Jun, the director for consumer goods in the China’s Ministry of Industry and Information Technology.

Kenya’s imports of medicinal and pharmaceutical products increased from 14,910 to 16,637 tonnes between 2010 and 2011 signalling increasing demand and room for investment.

Most of the drugs sold in local drug stores are imported with only 25 per cent being made locally.

The principal health officer of the East African Community, Stanley Sonoiya, said that the region has room for new investors seeking to set up manufacturing plants citing growing population and over reliance on imports.

“We are working on policy on harmonisation and functional medicinal registrations within the East Africa community,” said Mr Sonoiya.

Some of the Chinese companies eyeing new opportunities in the region are Beijing Tongretang Technologies which makes both traditional and modern drugs and China Sunshine, an exporter of drugs, laboratory supplies, dental products and surgical instruments.

Others are China Sinopharm International Corporation, Farmasino Pharmaceuticals.

The EAC region lacks the capacity to manufacture small volume injections (sterile), while large volume injections are only made in Uganda and Rwanda. High cost of medical equipment and drugs has been one of the causes of high cost of medication in the country.

The Chinese drug makers are following in the steps of their construction and engineering companies which today dominate infrastructure projects in eastern Africa.

General electric is also eyeing to export medical equipment into the EAC market indicating the increased interest in the sector.

Demand for drugs and other equipment has been increasing with rising population and incomes that have led to expansion of private hospitals.

Currently most of the drugs and chemical equipment sold in the region are from India and China which sell cheaper generics as opposed to protected drugs from the West.

Apart from Kenya the rest of the region does make Ophthalmic formulations, while Tanzania and Rwanda lacks the capacity to manufacture ocular formulations.

The whole region imports implants, sprays and inhalations, medicated dressings, immune and sera immunoglobins and only Uganda manufactures vaccines.

United Nations co-ordinator for UNAids in Eastern and Southern Africa Pride Chgwedere said that the EAC region has two million people who are eligible to use Antiretroviral drugs, making it a viable investment opportunity for ARV manufacturing companies.

Most of the drugs consumed in the EAC market (55 per cent) are procured by governments while the private sector supplies 45 per cent.