Merck’s Expansion Plans in Africa And its Continental Outlook
Friday, May 30, 2014
Dr Karl-Ludwig Kley, Merck CEO and Chairman of Executive board is a man who believes in Africa and says Merck is in the continent to stay. Read on as he talks to Africa Science News
Since last year, Merck has had a sudden burst of interest in Africa – why?
Early 2012 the Executive Board of Merck has taken the decision to further invest in Africa. Since then we have established new operations in six countries in Sub-Saharan Africa. But we are not new to this region: First certifiable contacts, e.g. to South Africa date back to 1897 where Merck then opened its affiliate in 1971.
We believe in the future of this continent. Therefore we are now present in Kenya with all our businesses. There are the biopharmaceutical division and the consumer health division, providing over-the-counter pharmaceuticals like Seven Seas. Moreover, we also decided to start with our two chemical divisions, the number two life-science business in the world, and our performance materials division, selling high tech chemicals like liquid crystals for TV displays and smartphones and effect pigments for cosmetics and coatings.
What is Merck’s projected investment portfolio in Africa?
Merck decided to provide two things: access to health and transfer of know-how and capacity building. With the diabetes drug Glucophage, Merck provides a product of highest quality, recognized as the gold standard by the medical community. The same is true for our hypertension treatment Concor and the market leading drug Gonal-F to fight infertility. We are also in the process to launch more products of our pharmaceutical portfolio in Kenya.
Through research partnerships with institutions like the Kenyan Medical Research Institute and Nairobi University or collaboration with local pharmaceutical producers we also build up local capacities. These are only two out of many examples which I believe is a sustainable way of building business in Africa. This means also that we do not plan to build an own production facility, but will help strengthen local companies instead.
The first Merck office in Sub-Saharan Africa was opened in Nairobi, Kenya, what is the significance of this move for the country?
Kenya is the leading economy in East Africa. Furthermore, the country’s strategic location and its well-developed business infrastructure will enable us to boost our business in the region. Kenya is the entry point to East Africa. And Merck has a lot to offer, e.g. accessible and equitable health care, and we thereby want to contribute to the country’s social and economic development.
What was the cost of setting up shop in Kenya?
Merck is committed to Africa and our investment in Kenya is a reflection of this. In the first 12 months we have hired 15 new people locally and will more than double this number within the next 15 months.
In 2012, we also started a Diabetes Awareness Campaign together with the Ministry of Health, the University of Nairobi and the Kenya Diabetes Information and Management Center providing information to the population and professional education to physicians on how to best diagnose and cure diabetes. This is by the way one of the fastest spreading non-communicable diseases in Kenya increasing the costs for the health system tremendously, if not addressed properly.
As you can see, investments must not only be counted in bricks and mortar, but more so in transfer of knowhow and building local capabilities.