Manufacturing Capabilities

Sustaining a cost-competitive manufacturing base

Leveraging the Group’s diverse and specialist production capabilities

Our strategic objective of supplying high quality, affordable medicines is underpinned by our own manufacturing capabilities and the vertical integration of certain aspects of our supply chain. Our 23 manufacturing facilities provide a range of production capabilities and capacities, assisting us in the achievement of our current and future commercial objectives. These include steriles, oral solid, semi-solid, liquids, biologicals, vaccines and API manufacturing. Our niche and complex production capabilities provide a strategic advantage in an increasingly commoditised environment.

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 045 million (2020: R2 039 million) with a further R2 000 million planned for FY2022. While the level of capital expenditure on these strategic projects is expected to reduce from FY2023, additional spend to increase vaccine manufacturing capacity is under review.

Following the transactions with AstraZeneca AB and AstraZeneca UK (“AstraZeneca”) and GSK which resulted in us acquiring our anaesthetics portfolio, we are transitioning supply from their manufacturing sites into our own sites and supply chain network, providing us with a strategic opportunity to pursue synergies. Significant capital projects are in progress at the Gqeberha, Notre Dame de Bondeville and Bad Oldesloe sites in order to transfer the manufacture from the AstraZeneca and GSK supply networks to these sites. First commercial production of these products at the Gqeberha and Bad Oldesloe facilities has commenced, with production scheduled to be initiated at the Notre Dame de Bondeville site in FY2023.

Oral solid dose manufacturing

We remain focused on increasing the complex manufacturing capability at the Gqeberha site. The Gqeberha site has the ability to provide flexible high-volume manufacturing and packing capabilities for a variety of different oral solids doses to several countries through the different regulatory approvals held by the respective units. Continuous improvement projects in respect of these sites are progressing well and delays due to the COVID-19 pandemic are in the process of being recovered, with key projects being:

Gqeberha, South Africa

• Continued the projects to implement a Manufacturing Execution System and a Laboratory Information System aimed at achieving additional operational efficiencies;
• An organisational redesign is underway to improve efficiency;
• Increased focus on initiatives to enhance competence at all levels across the site to ensure sustainable performance in the long term; and
• Projects aimed at self-sufficiency in terms of water and electricity supply progressed with solutions to provide back-up power and water supply available at the site.

Bad Oldesloe, Germany

• Serialisation and aggregation successfully integrated and adjusted according to market requirements; and
• Improved packaging capacity and efficiency has been used to increase Eltroxin production volume by more than 20%.

Semi-solid and liquid dose manufacturing

Bad Oldesloe, Germany

The extension of the manufacturing and packing lines to accommodate the transfer of anaesthetic liquids, creams and ointments is in progress. All production lines are installed and are qualified. Additional required upgrades in the bulk manufacturing area have also been completed. The first liquid line is already producing products for market supply and process validation of further products is underway. The next line is expected to go into operation in FY2022.

The project to install a new blow-fill seal line has been initiated. The building and all production machines are already installed and qualification has started. Remaining activities will be completed by early 2022. This line will provide competitive advantages and a production capacity of 120 million sterile single-dose poly ampoules per annum.

Sterile manufacturing

Our facilities at the Gqeberha and Notre Dame de Bondeville sites provide us with extensive sterile manufacturing capability. Capacity expansion plans in respect of these sites have progressed well in the past year:

Gqeberha, South Africa

• Commenced activities to introduce anaesthetics production, a significant step in the evolution of this site. Phases 1 to 3 of the new infrastructure build component is complete and equipment is in the process of being installed and commissioned. Equipment already installed is undergoing site acceptance testing. The first commercial batches were manufactured in March 2021. The introduction of these new products is expected to see the export volume for the total South African Operations business move from 20% to over 50%, with more than 700 additional stock keeping units being added to the existing portfolio over the ramp-up phase of some four years; and
• The facility received a vaccine manufacturing licence from SAHPRA in February 2021 and dedicated production of the Johnson & Johnson COVID-19 vaccine has been ongoing since first commercialisation in March 2021. Plans for expansion of the facility’s vaccine manufacturing as well as lyophilization capacity is at an advanced stage. This includes the required support services such as packaging, cold storage and laboratories.

Notre Dame de Bondeville, France

• The new suite to manufacture anaesthetic dosage forms comprising polybags and poly ampoules is complete. Qualification works are ongoing with the validation batches targeted to commence in the last quarter of FY2022;
• The new high-speed prefilled syringe filling line (60 000 syringes/hour) is ramping up with commercial production resulting in additional capacity for third party business;
• Installation of a new automatic visual inspection line for prefilled syringes is progressing with qualification and validation in progress, to commence commercial production in the third quarter FY2022;
• New autoclave investment for terminal sterilisation capabilities has been initiated to handle the growth of the diluent business at this site. Autoclaves will be installed and commissioned in FY2023; and
• An extension of the warehouse with a cold chamber (approximately 1 500 pallets) has been initiated to deal with the special requirements of vaccines storage. These works will be completed by the end of CY2022.

API manufacturing

Our API network comprises seven owned facilities, three located in the Netherlands (two in Oss and one in Boxtel), one in the USA (Sioux City), two in France (Notre Dame de Bondeville) and one in South Africa (Cape Town). In addition, we have two API manufacturing blocks situated at Laurus Labs Ltd in India. These sites provide Aspen with specialised API capabilities in respect of both our own as well as third party commercial opportunities. The combination of the Oss and Sioux City sites with the Notre Dame de Bondeville site provides a fully integrated biochemical supply chain to support some of our thrombosis portfolio of products. Initiatives to enhance our capacity and improve sustainability at the API sites have continued to receive focus as follows:

Oss, the Netherlands

• The De Geer site has completed the qualification of isolators in the powder-handling unit to enable the site to handle high potency APIs;
• An upgrade of the automation system in the milling/sieving facility has been completed and preparative work for the Manufacturing Execution System implementation is ongoing;
• Structural investments were made in the laboratory areas to further centralise the laboratories and integrate storage of stability samples and reference standards. Additional upgrades in laboratory automation/Laboratory Information Management System software are aimed at further improving efficiency;
• The Moleneind site completed structural investments in upgrades in the sewer system and started demolition of some of the older facilities and effected an upgrade of the peptide manufacturing capabilities;
• In the Biochem division, investment in filter drier capacity is supporting a second-generation heparin process;
• A water circulation unit was installed to improve the site’s firefighting capability in line with the site’s commitment to enhancing safety standards; and
• An active footprint reduction programme aimed at concentrating activities in core buildings is being implemented at the different sites in the Netherlands as part of the transformation plan.

Notre Dame de Bondeville, France

• The new certoparin facility obtained regulatory approval from BfArm and commenced commercial manufacture.

Notre Dame de Bondeville, France

• Additional steps have been taken to achieve further integration over the chemical supply chain. Additional production steps of intermediates in the rocuronium bromide synthesis have now been transferred from Oss to FCC as synergies across these two sites begin to be harnessed;
• FCC has been onboarded on the Oss SAP infrastructure. This was a major IT investment with impact on FCC’s ways of working, but constituted a substantial step into a further integrated API network/supply chain;
• The full-scale commercial manufacture of API was initiated in the newly validated high containment/high efficiency production block C2, in support of backward integration projects;
• The final validation of the recently installed high containment milling and micronising process centre was effected;
• The development and optimisation of an anaesthetic API, which will also support backward integration into the Aspen portfolio of products was concluded;
• Phase 1 of product development for strategic backward integration of oncology products, was concluded;
• A new water treatment plant for the use of alternate underground water supply during times of drought/constrained local municipal supply was commissioned and validated;
• A new hazardous aqueous waste treatment plant and a solvent recovery unit are being finalised, with both being installed and commissioned in the current financial year, resulting in significant long-term cost savings; and
• The upgrade and expansion of fire prevention and control systems in line with regulatory requirements has continued.

External supply manufacturing network

Our FDF manufacturing network also comprises supply from numerous contract-manufacturing organisations situated globally, several of which are located in Europe. A number of the products manufactured in the external network have been earmarked for transfer to our own manufacturing sites over the next five years. This move will enhance ongoing supply sustainability. We have an internal team of supply chain and quality experts who ensure that all the requisite controls are in place to facilitate supply, on time and in full, and in compliance with our required quality standards.

Reliable supply of quality products

We have commenced a strategic transformation project to create a modern, agile and integrated end-to-end supply chain. The improvement in the links between commercial forecasting and manufacturing, coupled with improved visibility and shared accountability for end-to-end supply chain performance, will result in the overall improvement of delivery of quality medicines to patients who need them. This robust process, which will be underpinned by new technology and data tools, improves delivery to patients, reduces service costs, and reduces the risk of stock-outs and inventory write-offs.

Cost containment and increased efficiencies

We have a strong focus on continuous improvement initiatives and savings plans to enhance production efficiencies and optimise economies of scale across the Group. Comprehensive, detailed, multi-year savings plans, covering all aspects of the operations, are progressing to plan and the improvements to the South African operations, the Oss and the Notre Dame de Bondeville sites are poised to deliver important future cost savings to the Group.

The cost-reduction initiatives fall into two distinct categories: procurement and organisational design. The savings plans have a phased implementation and should be complete by the end of the next calendar year. In addition to the procurement and organisational changes, structural process efficiency initiatives are ongoing and will have both an economical and an ecological improvement, supporting the Group’s sustainability goals.

The progress made in achieving these plans across the Group Operations is monitored on a regular basis. By owning our strategically important manufacturing capital, we are able to better manage our product quality, production efficiencies and cost competitiveness to ensure responsive management of the supply chain. This, in turn, supports the maintenance of Group margins.

Accolades

PMR.africa awarded Aspen Pharmacare the Business Excellence Award for its contribution to stimulating economic growth and development in the Eastern Cape province in South Africa.