VENTURES: Pinelands Gets A Growth Jab
Recent Western Cape Business News
THE sleepy suburb of Pinelands in Cape Town is to host what could become a major player in the manufacturing of vaccines.
A Gauteng-based health care provider Litha Health – now controlled by the JSE-listed Myriad Medical – has set up a fledgling vaccines manufacturing plant in Pinelands.
Currently Litha is a major shareholder in The Biovac Institute, the public-private partnership established to secure a reliable supply of affordable, high quality vaccines.
Since 2003 the Biovac Institute has met the massive annual order for government’s Expanded Programme on Immunisation (EPI) through importing and beneficiation within South Africa.
Litha is the dominant supplier of vaccines to the South African healthcare market and has played a leading role in rebuilding the country’s capacity for the domestic development and manufacture of vaccines.
According to Litha’s website, the vaccines division - within three years of its establishment - supplied between 50% to 60% of the public sector market. Business was mainly snatched away from multinational suppliers.
But in October 2007 there was a subtle shift with Litha starting domestic vaccine formulation and filling.
As such the Pinelands based production plant will specialise in vaccines that fall outside the scope of the EPI (such as rabies and influenza vaccines).
While the main customer will be the domestic public health sector, Litha could significantly boost volumes by producing vaccines for member states of the SADC.
Litha has also established Cape Biologicals, an equal partnership with a Thai company, BioNet-Asia, to ensure the business remains on the cutting edge.
Cape Biologicals has been developing advanced conjugate vaccines.
Anyone doubting the potential of Litha’s Western Cape manufacturing potential should glance over a recent transaction that saw Myriad taking a 51% stake in the company.
Myriad paid R114 million for the 51% stake - giving the business an enterprise value of more than R225 million. Myriad has also secured an option to buy out the balance of the business in the next couple of years.
Litha, which will only reach full-scale vaccine production at the Pinelands plant in 2013, turned over R314 million in the six months to end June 2009. The operating profit for the interim period was a wholesome R32 million – a figure that would obviously rise once the manufacturing margin from the Pinelands plant comes into play.
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