Photograph — Fortune

Leading pharmaceutical company, GlaxoSmithKline Consumer Nigeria Plc (GSK) has approved Fidson Healthcare Plc as a local supply chain partner to provide manufacturing support in Nigeria.

A press release issued by GSK explained that the decision to appoint the Nigerian pharmaceutical company was reached after an extensive request for quotation (RFQ) process that involved a number of local manufacturers in the country.

The approval, which is still subject to the meeting of appropriate regulatory requirements, will see GSK transition the manufacture of its respiratory and wellness products to Fidson from the third quarter of 2021. Specifically, Fidson will contract-manufacture five formulations (products) for GSK.

According to GSK’s Managing Director, Bhushan Akshikar, working with a local contract manufacturer for the supply of products will build local expertise, transfer technical knowledge and improve local production capacities in Nigeria.

Supply chain model restructuring

The contracting of a local manufacturing partner is part of a broader objective of GSK to restructure its internal operating model.

In a notice sent to the Nigerian Stock Exchange (NSE) earlier this month, GSK said it will shut down its manufacturing plant located in Agbara Industrial Estate, Ogun state by 2021 – the same year Fidson would commence the contract manufacturing.

The decision to work with local contract manufacturers for the making of its products was reached after an extensive review of its product supply operation.

“We believe this decision will allow us to build a more sustainable commercial business, enabling us to continue our efforts in supporting access to our consumer health products, medicines, and vaccines across Nigeria and West Africa,” Akshikar remarked on the partnership with Fidson.

The contract manufacturing strategy adopted by GSK is in line with the Federal Government’s industrialisation plan – the Nigerian Industrial Revolution Plan (NIRP), which is aimed at ensuring the country becomes the preferred pharmaceutical manufacturing hub in West Africa.

Presently, production of essential drugs in the country stands at 40 to 45 percent. In order to ensure drug security, pharmacists recently called on the government to increase the capacity to at least 75 percent.

Apart from guaranteeing access to quality and affordable medicines on a sustainable basis, a robust local pharmaceutical manufacturing industry would offer more through its value chain. Some of its other benefits include increased employment opportunities, foreign exchange earning capacity, industrial and economic development.

GSK also said in the statement that the move establishes the company as one of the “leading healthcare multinational companies localising production of its brands via local contract manufacturing.”

Also, all changes communicated do not impact GSK’s broader commitments to Global Health in Nigeria and across Africa. And despite the planned factory shutdown, GSK will still have a presence in the country and continue to be listed on the NSE.

GlaxoSmithKline Consumer Nigeria Plc (GSK Nigeria) is an affiliate of GlaxoSmithKline Plc – a global healthcare company that discovers develops and delivers innovative medicines, vaccines, and other healthcare products. It was listed on the Nigerian Stock Exchange in 1977.

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