Prime
Vet drugs factory to tap into opportunities in livestock sector
An animal health worker treats a cow.
Uganda has an agricultural sector that either employs or whose livelihoods depends on it, and contributing about 20 per cent to Gross Domestic Product (GDP). As such, it is not unsual to have a significant number of households that practise either mixed farming (livestock rearing and crop husbandry) or concentrating on livestock only.
Against this background, Alfasan Uganda, a private limited liability company, entered into the Ugandan market with to provide veterinary pharmaceuticals and other animal health products.
The factory project is as a joint venture by Alfasan Nederland B.V, Cygnus B.V (based in The Netherlands), Qualivet B.V (from Belgium) and Farm Support Ltd (from Uganda).
While based here, the outlook is aslo on the neighbouring countries, that is, Burundi, Tanzania, D. R. Congo, Rwanda and South Sudan.
Alphons Hennekens, The Netherlands ambassador, says the factory will help improve the livestock sector because it has been reliant on imported veterinary medicines. This creates outflows of foreign exchange, which could be re-invested in the sector.
In addition, he says the high quality medicines will increase productivity due to a lower animal disease burden. The quality control and monitoring will improve since National Drug Authority will have a role to playin this.
“The factory will manufacture drugs and also act as a training ground for veterinarians,” he said.
Stephen Birungi, the chief executive officer, Alfasan Uganda and Farm Support says the Dutch Government funded part of the project starting with Phase I through a grant of €750,000 (Shs2.8b).
“We are encouraged to make this investment aware that our government or government bodies will render the necessary support given the innovative nature of this undertaking.”
It is first GMP veterinary factory which has been set up using technology from The Netherlands. So, it is transferred to our country at no cost.
“We shall benefit from free technology transfer that would cost a company like ours between $500,000 -$1m to muster over five years,” he said.
He expects the cost of veterinary medicines to become cheaper by between 30-40per cent (European quality).
The reason is that the biggest cost component of imported drugs is labour cost.
“Whereas we shall pay our staff 50 per cent higher than market average, the labour cost will still be much cheaper than it is in Europe and Asia. Also cost of inputs such as packaging will be cheaper,” he noted
The factory will create jobs in three categories. There will be the direct jobs created in the factory production and administration including salespeople, the indirect jobs comprising distributors and their staff. Finally, there will be jobs created through better livelihood for households engaged in livestock husbandry.
Stephen Bayite-Kasule, the economic diplomacy and agribusiness officer at The Netherlands Embassy, also notes that there will be increase in national income. “We expect this to be realised through the resultant reduction morbidity rates for livestock. If this factory were to be completed as planned, we expect a knock-on effect through increase in cattle population from 11.4 million to 20 million within 10 years.”
Poultry will also triple from the present 37 million to more than 100 million. “We expect increases in the number of goats, pigs and so many more as well. With the number of animals dramatically increasing, Uganda should have the capacity to sustain supply to neighbouring countries through exports of live animals for breeding or processed animal products,” said Bayite-Kasule.
A huge bill
Uganda imports drugs worth $25m per year and this is expected to double in five years. About 40 percent of this is consumed by the neighbouring countries through formal re-export or through informal cross-border trade.
