Aspen to invest in Port Elizabeth
Aspen Pharmacare says it will make SA’s “single biggest pharmaceutical investment” when it pours another R3.4bn into its factory in Port Elizabeth.
Aspen Pharmacare says it will make SA’s “single biggest pharmaceutical investment” when it pours another R3.4bn into its factory in Port Elizabeth.
The funds would be for the production of sterile anaesthetics —“a niche, high-tech manufacturing capability that presents both domestic and export opportunities”, Aspen senior executive Stavros Nicolaou said.
Nicolaou was speaking at SA’s inaugural investment conference, where President Cyril Ramaphosa aimed to raise funds as part of his plan to get $100bn in new investments into SA.
Nicolaou said Ramaphosa’s drive to create “a more predictable, stable investment environment and reducing regulatory burden in key economic sectors, such as the pharmaceutical sector, is very encouraging.
“While Aspen operates manufacturing plants in many geographies, it has chosen SA as the location for its largest and most critical manufacturing facilities,” he said.
While Aspen was encouraged by the government’s “investment direction”, a number of regulatory hurdles remained in the pharmaceutical sector, Nicolaou said.
“Our latest investment undertaking is a clear vote of confidence in the president’s commitment to resolving these hurdles and establishing a more conducive investment climate in the sector, bringing with it the momentum for further pharmaceutical investments.” The Port Elizabeth investment would transform the facility into “one of the world’s leading global hubs for anaesthetic products” and would boost the Eastern Cape’s economy.
Aspen’s shares plunged by nearly half to R142.08 on Friday, weeks after it announced its annual results in September. An equity analyst said the sell-off ensued because investors had been disappointed by the group s numbers, including operating margins, cash flows and gearing levels, which meant “the narrative around the Aspen story has changed a bit”.
Others said the sale of Aspen’s nutritionals business for less than the market expected also contributed to the decline.
Earlier in October, Aspen’s founders bought R110m of its shares saying they believed in Aspen and what it did.