35-YEAR TRACK RECORD

Nigeria 2020 | HEALTH & EDUCATION | VIP INTERVIEW

TBY talks to Somnath Malakar, Managing Director of Shalina Healthcare, on being a market leader, establishing a new plant, and competing with the counterfeit market.

Can you tell us about your first manufacturing plant in Africa, when it will be up and running, and how you financed the investment?

Shalina is the market leader in sub-Saharan African pharmaceuticals, with a 35 year track record in providing quality medicines at affordable prices. No other company has our heritage, reach and presence. In Nigeria we have been one of the fastest growing companies in the last five years, with our brands such as Ibucap, Epiderm, Shal'artem, Polygel, Hemoforce, Shaltoux, Tanzol, and Super Apeti becoming highly valued and trusted by our customers, pharmacists, and doctors. We have long wanted to have local manufacturing in Africa, but we didn't want it to compromise our core values of quality, affordability, and availability. The decision to set up our first African plant in Nigeria was based on the potential of the Nigerian market, where we envisage our business to grow significantly in the next five years, and the resources available in the country. I am pleased to represent the company in a country where we will put up our first factory in Africa. The first brick of the factory was laid at the end of November and we will complete the plant by December 2020. That is a rapid turnaround. Hopefully, moving forward the government and different bodies will continue to take steps to encourage further investments in the country. The financing for the facility has come from a significant equity investment from the Group supported by a loan from the Bank of Industries.

What challenges are you encountering?

The challenges are no different to building a plant in many other countries, from securing sufficient land with the right access through to planning, regulatory approvals and environmental compliance. We are building this plant to meet WHO-GMP certification, so we need to make sure all of this is done right.

How will the new plant change operations for Shalina and the sector?

Shalina Healthcare has large ambitions, and local manufacturing is a key part of that. We want to be supporting the local economy not just with the quality of our products but through jobs and investment. In Nigeria the authorities have looked to encourage investment in the pharmaceutical space by offering reduced import tariffs for manufacturers or banning some products from import. With this plant we can manufacture locally, remain cost competitive with Indian and Chinese imports while providing our customers with essential medicines that they can trust. With a WHO-GMP certification, we will be manufacturing to a very high quality – and we want our customers to be proud of the 'Made in Nigeria' badge.

How will Nigeria progress in local manufacturing in the short term and what problems do you expect to still exist?

We would hope to see further incentives provided by the Nigerian authorities to both encourage local manufacturing and reward those who have already invested. We want to see a self-sufficient Nigerian pharma market with strong regulation, and everyone manufacturing to the same standards we set of ourselves. We think this will happen long-term but in the short-term expect a continuation of the same challenges faced to date – macroeconomic volatility, lack of infrastructure, insufficient incentives, competition from lower quality imports and local companies, and sadly, the ongoing presence of counterfeits.

How do you compete against fake drugs available at low cost?

Low-cost counterfeits are sadly found across all of Africa, and are a problem for all pharmaceutical companies and of course the end-consumers. However, as we only sell to sub-Saharan Africa, we are perhaps more focused on addressing these fakes than many other companies exporting from India and China. Moreover, as one of the largest pharmaceutical companies in sub-Saharan Africa, we have several advantages that help us address the problem better than most. Firstly, we use our scale and our end-to-end distribution to maximize our efficiency, meaning that our own products are themselves affordable as well as being high quality. Second, we have teams in India and China looking to stop the manufacture and export of fakes at the source. Third, we are always looking to innovate, either with technology or packaging enhancements, to make it harder for fakers to copy our own products. Finally, we have large, on-the-ground sales teams which give us a significant advantage – our retail and wholesale customers know that they are buying direct from Shalina, and in turn we can educate them on what to look out for. We also host a lot of community activities, including malarial camps, de-worming camps and market clinics, where we work with teams of doctors to address the medical needs of those who don't typically have access to health professionals or medicines. Our market clinics can see as many as 700 people in a day, and we use these opportunities not just to provide free medicine but to educate these patients on what to look out for. In a country like Nigeria, it is indeed a very difficult task to tackle the menace of Fakes. From our side, we seek to create value and use that as a differentiator from the rest of the competition. Our perfectly capable team on ground, spread across the length and breadth of the country ensuring connect with the last mile of distribution so that the correct products reach in the hands of the end user. Be it in terms of our brand presence at the Retail or even through the various initiatives we undertake in the different markets and channels we operate in; we always seek to bring about the element of value to position Shalina differently. For example, through our unique Shalina Preferred Partner Program (SP3), in retail we have gone beyond providing just profits for the partner but are now creating well-being and health security for them. There are also Shalina Market Clinics which we carry out across the country where we seek to create value with relevance. A group of doctors does free health check-up, prescribe medication and mostly provide free Shalina medicines to approximately 400-500 patients (with conditions of fever, body pain, malaria, or even anemia) in each such clinic who otherwise are deprived of such facilities in their proximity. Considering the high prevalence, they are also checked for diabetes even though we do not have a diabetes portfolio. Our other initiatives include de-worming camps, anemia-detection camps, antenatal camps (designed especially for women), where we engage nurses and physicians together with our partner pharmacy customers and hospitals. The enthusiasm and gratitude of all such stake-holders are not only significant to our successful journey so far but also helps us maintain ourselves as an organization with a difference.