Adcock plans expansions & acquisitions to drive growth

25-May-2010 - Last updated on 26-May-2010 at 08:53 GMT

Adcock Ingram recorded an 11 per cent rise in profit in the first half of 2010 and is looking to continue this upwards trend through manufacturing expansions, plus local and overseas acquisitions.

Expansions and acquisitions underpin South Africa-based Adcock’s efforts to develop its pipeline and remain an attractive partner for multinational pharma companies.

The acquisition is focused on three geographic regions: South Africa and adjacent areas, sub-Saharan Africa and overseas. Through implementing this strategy Adcock has strengthened in its local market and acquired Ayrton and Dawanol to give it a presence in west and east Africa.

Overseas acquisitions will be considered to drive future growth. Speaking at the presentation of the financial results, Jonathan Louw, CEO of Adcock, expressed a desire for 30 per cent of the company’s earnings to come from overseas in the future.

This will be supported by Adcock’s in-house distribution network. Adcock claims to be the only South African pharma with its own distribution network and Louw believes keeping this in-house makes it more attractive to international partners.

In particular, Adcock has expertise in handling liquids and cold chain. Upgrades to the company’s regional distribution centres in Durban, Bloemfontein, East London and Cape Town are planned.

Expansions

Adcock has initiated expansions at its manufacturing sites in Wadeville, Clayville and Aeroton in South Africa and Bangalore, India to boost capacities and capabilities. More than 80 per cent of Adcock’s products are manufactured in South Africa.

The Wadeville site produces pharmaceutical liquids and high potent tablets. A second phase of expansion is nearing completion and a third, focused on increasing capacity, is planned.

Louw added that the site is in the process of gaining approval from the US Food and Drug Administration (FDA) which would help it win business from non-governmental organisations (NGO). Furthermore, it approval will support the export and contract manufacturing businesses.