South African companies make waves in technology
South Africa’s economy may be reeling under the impact of Covid-19, but many of its tech companies are at the front of their field.
The announcement by global pharmaceutical giant Johnson and Johnson (J&J) that it would partner with Durbanbased drug maker Aspen to produce Covid-19 vaccines in November is testament to South Africa’s growing technological capabilities. Africa’s largest pharmaceutical company has the capacity to produce 300m doses a year at its plant in Port Elizabeth where production should begin in April, if the vaccine passes the final stage of clinical trials.
As South Africa struggles, along with African counterparts, to secure vaccines, a senior executive at Aspen said that the doses will be destined for J&J’s “global supply inventory”, declining to comment on whether any would be used locally. Regardless of the destination, the confidence placed in South Africa by J&J to produce its vaccines is a rubber stamp on the reliability and sophistication of the country’s manufacturing sector.
“J&J is a large multinational – its market capitalisation is bigger than South Africa’s GDP,” said Stavros Nicolau, Aspen’s group executive for strategic trade development, addressing the third national investment conference in Johannesburg last November. “When you have a company of that size partnering with a South African company it speaks volumes about what South Africa is capable of. In terms of science and technology, the world is starting to see us differently.”
The announcement follows Aspen’s $231m investment in Port Elizabeth in 2018 to manufacture sterile anaesthetics. It remains the largest pharmaceutical investment in South Africa and the facility is the “single largest manufacturing hub for anaesthetics” in the world.
Innovative source of refrigeration
However, Aspen is not the only South African company at the forefront of its field. Renergen, an energy company listed on the JSE and Australian Stock Exchange, has pioneered a zero-emissions cold-chain logistics solution for use in liquefied natural gas (LNG) powered trucks.
Most refrigerated trucks burn thousands of litres of diesel per year running a compressor that keeps the cargo cool. Renergen has designed a product that uses the -162°C storage temperature of LNG to fuel the truck and cool it at the same time.
The gas must be brought to a temperature of around 15°C before being used in the engine. The cold energy produced as a byproduct of this process is used to refrigerate the vehicle.
“The cold you are getting is completely free because you needed to do it anyway,” CEO Stefano Marani tells African Business. “This is the first product of its kind anywhere in the world.”
Trucks adapted to use the innovative system will see a 23% reduction in fuel bills compared with diesel. The Johannesburg-based company has signed a deal with Total to distribute LNG at the oil major’s service stations across South Africa, beginning with the route from Johannesburg to Durban, where it should be available from the third quarter of this year.
Renergen will supply the gas from South Africa’s first LNG plant, which it is constructing as part of its Virginia Gas Project in the Free State, where it has exploration and production rights for 187,000 hectares of gas fields. The small-scale plant is aiming to produce 645 tonnes of LNG by the third quarter.
Exporting helium to the world
Along with natural gas, Renergen is hoping to put South Africa on the map as a major global helium exporter. The gas is a crucial component in a number of instruments including MRI scanners, telescopes, radiation monitors and spacecraft. The US has deemed helium critical to its national security as global supply is dwindling.
Helium is a component of natural gas that is released during processing, and the Virginia Gas Project fields are believed to have one of the highest concentrations in the world – Marani says that the latest well contains a concentration of 12%, which compares extremely favourably with the 0.01% found
in Qatar, one of the world’s major producers.
“We will be a major exporter in 2023,” he says. “We will be a very meaningful global supplier. Depending on studies, South Africa will be supplying anywhere from around 3 to 5% of the world’s helium by 2023 and then we would look to double that by 2025.”
Pivoting to South Africa’s need to distribute Covid-19 vaccines, Renergen has developed Cyro-Vac, a portable helium-powered storage box that can transport vaccines from between -70°C to -150°C for a period of up to 30 days. This could be extremely useful if South Africa turns to the Pfizer/BioNtech vaccine, which must be stored at below -70°C. The company estimates that in some conditions the operating cost of the case could be less than $3 a month per dose.
Creating power out of waste
As South Africa makes moves to disentangle its economy from an overreliance on coal (see pages 34-35), other forms of energy – especially renewables – are key to securing the transition.
Bio2watt is a Johannesburg-based company using landfill waste to power turbines and create energy that is sold to the private sector. It currently has a 4.4 MW plant near Pretoria that powers a nearby BMW factory.
“We get around 300 tonnes a day of food waste from surrounding cities,” says Sean Thomas, managing director. “And the process is to produce gas. That gas is used in internal combustion engines to produce power, and that power we put in the national grid and our client offtakes it just outside Pretoria.”
The waste to energy (WtE) sector is still relatively new in Africa with only a few other projects in Kenya and Nigeria. However, it is big business in Europe, in countries like Germany, Denmark and France.
Thomas says the technology has “huge potential” on the continent as it provides a waste solution while also producing fertiliser as a byproduct.
“It’s a solution for the likes of Danone, Nestlé and Unilever,” he says. “They can deposit their waste instead of sending it to a landfill and the final product is a soil enhancer that goes back into the environment. It’s a win-win in terms of job creation, landfill avoidance and power.”
The emerging power source is difficult to finance as banks do not yet fully understand how to support the sector, Thomas adds. The sector is currently financed by impact investors and development finance corporations. However, Thomas hopes that with a couple more projects on the continent in the future commercial banks will “have more appetite to support these types of initiative”. ■
Aspen, Africa’s largest pharmaceutical company, has the capacity to produce 300m doses of Covid-19 vaccine a year at its plant in Port Elizabeth where production should begin in April