Manufacturing Capabilites

Sustaining a cost-competitive manufacturing base
Leveraging the Group’s diverse and specialist production capabilities

Our strategic objective of supplying high quality, efficacious, affordable medicines and products is underpinned by our own manufacturing capabilities and the vertical integration of certain aspects of our supply chain. Our 23 manufacturing facilities present a range of production capabilities and capacities aligned with our current and future commercial objectives. These include injectables, oral solid, semi-solid, liquids, steriles, biologicals and API manufacturing. Our niche and complex production capabilities provide a strategic advantage in an increasingly commoditised environment. An overview of the Group's strategic manufacturing capabilities is set out on Our manufacturing capabilities. Carrying value of property, plant and equipment (R12 065 million)

During the last year, our strategic manufacturing projects continued to focus on the alignment of our facilities with our manufacturing and commercial strategies, enhancing technology as well as our quality and compliance standards, policies and procedures. Ongoing investment in the upgrading of our world-class manufacturing facilities in addition to the implementation of state-of-the-art electronic systems and IT capability supports our ability to supply quality products, ensures ongoing compliance to GMP and creates increased manufacturing capacity to meet both current and future operational requirements. Capital expenditure on the replacement and expansion of property, plant and equipment amounted to R2 442 million (2018: R2 145 million) with a further R2 600 million planned for 2020. The level of capital expenditure is forecast to reduce significantly from the 2021 financial year.

Following the Anaesthetic transactions with AstraZeneca and GSK, we have integrated the manufacturing sites responsible for the supply of some of these products into our supply chain network, which provides us with a strategic opportunity to pursue manufacturing synergies. Significant capital projects are in progress at the Port Elizabeth, Notre Dame de Bondeville and Bad Oldesloe sites in order to transfer the manufacture from AstraZeneca, GSK and some external supply contract manufacturing sites. The expected first commercial production at the Port Elizabeth and Bad Oldesloe sites is in the 2021 financial year with Notre Dame de Bondeville following in the 2022 financial year. Full commercial benefit from this strategic investment of R4,9 billion in total is expected in the 2024 financial year.