Pharma chains on the way

Pharma chains on the way

While pharmacy chain stores are a common sight on the high streets of the US, UK or Japan, they are few and far between in most African countries. However, Kenyan firm Haltons is seeking to replicate the success of its counterparts in the industrialised world, following an undisclosed investment by private equity fund Fanisi Capital last year. Neil Ford reports.

There are currently thousands of unregistered and unofficial pharmacies across the continent, offering a piecemeal supply of branded, generic and fake medicines. The Active Pharmaceutical Ingredients (API) are sometimes adulterated to make them go further; others contain no active ingredients at all. The emergence of a big national chain that targets low income families could therefore offer a great deal of confidence to consumers.

Fanisi has also invested in Rwandan pharmaceutical wholesaler Sophar. In a statement, the company explained: “Sophar’s core business involves the importation and marketing of branded pharmaceutical drugs within the Rwandan market.

“With a unique semi-cooperative structure and successful business model shareholders are the main customers – the company is set on the path of faster growth in product range, geographic reach and distribution capability.”

Similarly, private equity firm Catalyst Principal Partners bought a stake in Kenya’s Mimosa Pharmacy in August jointly with Africa Chemist and Beauty Care (ACBC), a Mauritius-based pharmaceutical chain.

The managing director of Catalyst, Biniam Yohannes, says: “The sector has evolved rapidly over the last decade, with increased consumption of pharmaceutical and personal care products in formal retail channels. Our investment will further fill the gap between the consumer demand and market supply, with the aim of building the business into a world-class pharmacy retail chain of regional scale.”

One barrier that will take many more years to overcome is the urban-rural divide in Africa. The lion’s share of drug sales on the continent are made in urban areas and the provision of pharmaceuticals and indeed medical treatment of any kind is limited in more remote areas. Two thirds of all drug sales in Angola, for instance, are made in the capital Luanda.

While reliable pharmaceutical retailing would be a breakthrough in Africa’s big cities, there is little prospect of it emerging in rural districts within the next generation

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