Read the Conversation
EF: what is the importance of the healthcare business to DP World, and what are your priorities for 2024?
CO: DP World is a global leader in supply chain, logistics and trade. Our agenda centers on fostering sustainable economic growth and enhancing supply chain efficiencies in South Africa and Sub-Saharan Africa.
DP World is dedicated to modernizing ports, logistics, and infrastructure, increasing the capacity and efficiency of terminals, and improving the overall competitiveness of African markets on a global scale. We believe in building strong partnerships with both public and private sectors, prioritizing collaboration with government bodies, local businesses, and international partners to drive projects that support economic development in South Africa and the wider region.
Healthcare logistics is one of the key pillars underpinning economic growth, fitting seamlessly into DP World's overarching mission. Access to medicines is critical in developing markets across Africa, and we have played a significant role in this sector. We believe our responsibility is to ensure equitable healthcare by connecting patients with quality medicines. As one of the continent's leading healthcare distributors and logistics companies, particularly in Anglophone Africa, we see ourselves as key players.
In South Africa, we have two healthcare businesses: one focused on logistics, and the business I manage, which focuses on market access.
When I took over as MD, the focus was on reassessing our strategy and identifying areas where we could make a significant impact. I am pleased to report that we have made substantial progress. Initially, our business was about 85% generics, but we have diversified significantly today. We now distribute biologicals, biosimilars, emergency medicines, medical devices, and generics, with generics comprising about 25% of our overall portfolio. This shift, achieved in a short period, allows us to provide medicines that have a greater impact on patients and healthcare providers.
EF: Could you elaborate on DP World’s new organizational structure?
CO: DP World significantly increased its presence in healthcare through the acquisition of Imperial Logistics in 2022. Our leadership team has ensured that our healthcare businesses' management and strategy remain strong and effective, giving us the platform we need to grow.
This approach has allowed our healthcare sector to maintain its strengths and continue delivering on its commitments. I am as excited to be part of this organization today as I was five years ago because of the impact we can have on the healthcare landscape in Africa. Additionally, being part of a large multinational like DP World opens up many more possibilities. With DP World's extensive infrastructure and presence, especially in India, we can now offer end-to-end supply chain solutions. This capability allows us to integrate and enhance access to medicines, providing a comprehensive "factory door to customer floor" service that significantly benefits healthcare delivery in South Africa and beyond.
DP World's acquisition has also opened up new possibilities for us in South and Sub-Saharan Africa. Regarding the National Health Insurance (NHI) initiative, there is a strong drive for greater investment in local pharmaceutical manufacturing. We aim to develop and maintain long-term strategic relationships with local and generic medicine manufacturers from India. We believe we can be a partner that provides an end-to-end solution, whether for a local manufacturer or a national supplier to the NHI, thanks to our capabilities and infrastructure that cater to both suppliers' and NHI's needs.
EF: How are you securing partnerships for sustainable growth?
CO: From a partnership perspective, Imperial and DP World have been actively involved in establishing Unjani Clinics. Recognizing the critical role that logistics and supply chain management play in the healthcare sector, we have historically engaged in and will continue to pursue collaborations that address pressing healthcare challenges in South Africa.
With the public healthcare infrastructure facing significant issues, there is a substantial need for primary care for a large portion of the population. Our partnership with Unjani Clinics aims to address this by developing a healthcare network that provides services to those without access to private healthcare. DP World is one of the founding funders of Unjani Clinics, which works to bring affordable healthcare to communities across South Africa.
Unjani Clinics was founded to establish a sustainable, nurse-led primary care model. This initiative empowers nurse-preneurs to develop and expand primary care facilities, particularly in rural areas with limited access to primary care. This partnership exemplifies our commitment to improving healthcare accessibility and addressing critical needs in the region.
DP World has sponsored 49 Unjani Clinics across South Africa, contributing to over 5.2 million patient engagements to date. Additionally, through a partnership model, the network has expanded to over 200 primary care facilities.
From a supply chain perspective, we have recently collaborated with Unjani Clinics to provide affordable blood glucose meters and strips, increasing access to diabetes management and testing. We are pleased to have secured an agreement to supply these essential tools to all Unjani Clinics nationwide.
Moreover, as part of our market access initiative, we leverage our ability to procure and distribute medicines within the country. We are actively seeking opportunities to support Unjani Clinics by providing medicines at affordable prices, ensuring a consistent supply, and thus enabling better patient care. Consistent availability of drugs is crucial, as a lack of supply directly impacts patient treatment.
We have also developed a model to support emerging microenterprises. This effort aims to foster economic growth and empower local businesses, further contributing to the well-being of communities. These are primarily Black-owned enterprises emerging in the healthcare industry that have faced challenges in growing beyond a certain point due to various factors, such as access to financing, capabilities, and footprint. This week, we signed our first contract with one such enterprise, which will involve us assisting them in sourcing raw materials, bringing them into South Africa for local manufacturing, and handling all warehousing and distribution. This support will allow them to expand their market offering and grow their presence, as larger hospital groups often only provide small portions of the volume they believe the company can manage.
With our support, this company can become a more significant player in the sector, aimed at growing local manufacturing and expanding local capabilities. This approach also aims to meet our healthcare needs through local suppliers. This will be a journey, and we will continue to expand these efforts because we believe that empowering these emerging microenterprises and helping them grow will enable them to become significant contributors to the overall healthcare sector in South Africa. Not only will this create jobs and develop local talent and capabilities, but it will also contribute to the growth of our own business as a result.
EF: How do you envision South Africa evolving into a hub for innovation in Africa and becoming a driving force for the continent?
CO: I believe South Africa, the largest healthcare market on the continent, is well-positioned to become a hub for innovation. It has a robust infrastructure compared to other African countries, particularly regarding technology, skills, and capabilities. The private healthcare sector in South Africa is well developed, with major players like Aspen and Adcock leading the way as significant generic manufacturers. The volumes we can produce and import from India for the public sector could serve as a springboard for other markets.
However, it's important to note that there are scenarios where it might be more economical to supply through countries like Kenya or Tanzania due to their road infrastructure and other factors. Still, South Africa can become a model for the rest of Africa, allowing other countries to learn from and adapt what has been successful here. Not everything translates directly; and while not every initiative will succeed, South Africa has gained valuable insights through its experiences.
As many markets now embark on developing their local manufacturing capabilities, a challenge often arises that regulation tends to come first, followed by planning and execution. We have witnessed instances where regulations prioritize local manufacturing of certain products. Still, the existing capacity falls short of meeting local demand, creating additional barriers for medicine importers trying to deliver to patients.
There is a clear need for effective planning in the transition to local manufacturing, along with the transfer of technology and skills, all supported by appropriate regulatory frameworks.
EF: What is your strategy for attracting resources to the country and your business?
CO: The advantage we have at DP World in our healthcare businesses in South Africa, is our world-class facilities, of which only a select few possess certifications. When working with multinational pharmaceutical manufacturers that must adhere to global standards, they seek partners with the right capabilities, policies, and procedures to ensure patient safety and confidence in how medicines are handled, stored, and transported.
We are one of the few companies capable of providing this level of assurance, guaranteeing the proper handling of products and delivering them to patients nationwide. We have the necessary footprint to support this as well. Furthermore, our capabilities extend to managing everything from unscheduled medicines and controlled substances to medical devices and capital equipment. We can also handle various storage requirements, including ambient, cold chain, and sub-zero conditions.
As a service provider offering a comprehensive suite of services, we are one of the few companies that can provide a one-stop solution for all current and future healthcare needs. This is a key value proposition for us. In addition to our well-established operations in South Africa, we have similar capabilities across the rest of Africa. This means you can have a single partner supporting you in South Africa and a local presence in markets like Namibia, Botswana, Kenya, Ghana, and Nigeria. Having a trusted partner simplifies the operating model for many companies, especially since Africa can be challenging to navigate from a regulatory standpoint.
In South Africa, our in-house regulatory team provides registration services for manufacturers lacking the capability to register their medicines locally. For example, there was significant media coverage last year regarding antivenom shortages in South Africa. We successfully sourced a supplier and facilitated the importation of antivenom via Section 21, the named patient importation route, to ensure its availability during emergencies. It is crucial to pursue product registration concurrently, and we will soon submit the dossier on behalf of the manufacturer.
In healthcare logistics and distribution, we possess capabilities that our competitors currently lack. Not only can we manage logistics, warehousing, and distribution, but we also can register medicines. We hold our own medicines license, a complementary license, and a medical device license in South Africa. This allows us to partner with manufacturers who have products addressing medical needs, register those products under our licenses, and ensure that patients in South Africa gain access to them.
Our primary focus is connecting patients with quality medicines and products, which is core to our mission.
EF: What accomplishments in your role have contributed to the company's growth? Additionally, what are your goals for the next five years?
CO: I have accomplished several things and am truly proud to be part of DP World. Our mission remained unchanged throughout the pandemic: to improve access to quality medicines and healthcare products.
One example that stands out is our launch of the first noradrenaline in South Africa last year in partnership with a small, emerging microenterprise. Despite their limited infrastructure and capacity, we chose to collaborate with them to bring this life-saving medication to the market quickly, including to the public sector, where access was previously restricted. Witnessing the positive impact of this initiative has been incredibly rewarding.
Another significant moment was our involvement with antivenom. While it may not be a major profit driver because of the nature of the product, knowing that our efforts contribute to saving lives is deeply satisfying.
Looking to the future, I am excited about our partnership with Digistain, which specializes in innovative breast cancer testing technology. They use spectroscopy to measure markers at a protein level to deliver a personalised risk score for breast cancer therapy guidance. We are working to make this technology available in South Africa and throughout the rest of Africa. This approach could reduce testing costs by up to 30% and reduce the waiting time from 4-6 weeks to just 3 days, making this approach more accessible to patients.
Breast cancer is one of the leading cancers in South Africa, so partnering with organizations that introduce such impactful technologies and treatments is crucial for us. I look forward to seeing how this initiative evolves and contributes to improving patient outcomes.
