The African pharmaceutical market is one of the fastest growing industries in the world. Nigeria alone reports an annual growth percentage of approximately 12%. It is perhaps no surprise then that one of the largest pharmaceutical companies in the world has recently invested substantial amounts of money into the African pharmaceutical market.
GlaxoSmithKline is a British company that is dedicated to the manufacture and production of pharmaceutical and consumer healthcare products. The company is the fourth largest pharmaceutical company in the world and continues to grow and evolve. Their latest proposed investment in the African pharmaceutical industry is rumoured to be worth approximately £130 million.
The value of improving economic growth
Factors such as improved economic growth and an increased demand for pharmaceutical products within African countries are the driving force behind the proposed investment. Africa is changing rapidly in terms of both social and economic aspects. An increase in the percentage of families within the middle-class section of society has seen the demand for treatments in relation to acute infections grow substantially in recent times.
The predicted increase in infections and diseases such as lung and heart problems, diabetes and cancer has resulted in the pharmaceutical industry in Africa enjoying a particularly buoyant period. This has alerted some of the biggest pharmaceutical companies in the world and further investment seems likely to follow.
GlaxoSmithKline specialise in the production of products for infections and diseases such as cancer, diabetes, asthma, digestive conditions and virus control. The demand from the middle class population in African countries for products such as these is at an all time high. It is no surprise that the company has earmarked a substantial investment for the pharmaceutical market there. GlaxoSmithKline is committed to investing in the emerging markets throughout the world.
Identifying the huge potential
As recently as March 2014, the company invested almost $1 billion in order to continue its investment in its Indian pharmaceutical centres. This investment has resulted in an increased share percentage of 75%. As with India previously, many African countries are showing signs of possessing huge potential in relation to pharmaceutical products. GlaxoSmithKline already has several manufacturing units in African countries such as Kenya, Nigeria and South Africa, so is no stranger to the African pharmaceutical market. Projects such as that by Crystal Thorpe in Lagos, Nigeria are already underway to improve facilities in these countries.
GlaxoSmithKline is committed to providing the necessary levels of pharmaceutical products to the African population. The proposed investment of £130 million, which will be used to further increase the company’s manufacturing capabilities in their factories throughout Nigeria and Kenya, is expected to be the first of many future investments. Indeed, it is reported that GlaxoSmithKline also have plans to construct a further five manufacturing sites in Africa over the next five years. With the proposed investment looming, GlaxoSmithKline has been steadily increasing their stakes in various businesses throughout Africa. They have also spent a lot of time and effort in relation to increasing sales capabilities and associated services.
An investment strategy that could help to combat infections
GlaxoSmithKline is a company that has a very real interest in the welfare of the world's population. This latest foray into the African market is seen as both an investment strategy and an opportunity to help combat an increasing number of infections and diseases that are affecting the population of Africa. The company currently works in conjunction with the World Health Organisation to tackle lymphatic filariasis, a condition that affects almost 120 million people worldwide.
The agreement between GlaxoSmithKline and the World Health Organisation will see the former hand over 400 million albendazole capsules free of charge, each and every year to aid the fight against the disease. Despite the African pharmaceutical industry being relatively small, it is widely considered to be the fastest growing in the world. The increase in acute diseases and illnesses has resulted in a scenario of demand largely outweighing supply that threatens to hamper its economic and social growth.
Despite Africa importing pharmaceutical products from across the world to combat conditions such as heart and lung disease, cancer and asthma, it still requires a substantial home-based investment. The demand for such products looks set to increase as more and more Africans leave their rural homes and relocate to urban locations. The investment by GlaxoSmithKline suggests that Africa could become a leading location in relation to the production of pharmaceutical products for major companies throughout the world.