Establishing A Globally Competitive Pharma and Medical Manufacturing Cluster

Africa is the world’s second most populated continent, accounting for just under 18% of the global population.  Despite this, the continent is accountable for at least 25% of the world’s disease burden.

With more than its fair share of diseases, the World Economic Forum estimates that the total demand for packaged medicines in Africa is around $18 billion per year.  Interestingly, 61% of that is serviced through imported products, with only 36% being locally produced. Of the 36%, 40% of the production capabilities are confined to packaging and labelling with the remaining 40% limited to filling and finishing (Who Owns Whom, 2023).

For Africa to effectively service the medical requirements of its 1.4 billion people, countries on the continent must acknowledge the need to enhance their pharmaceutical and medical production capabilities. 

In recognition of this, the OR Tambo International Airport Special Economic Zone (SEZ) has designed, and is in the process of developing, a globally competitive medical manufacturing cluster that will enhance the production and export of medical products from South Africa. 

OR Tambo SEZ’s Bold Ambitions

Comprised of 265,000m² of developable space, the OR Tambo SEZ Precinct 2 development is well positioned to support the production and export of time-sensitive products such as medicines.

Located on the doorstep of OR Tambo International, the SEZ is an ideal location for the production and export of high-value, light weight products that utilize air freight as a mode of transport.

In support of its competitive value proposition, the OR Tambo SEZ completed industry-specific research that identified different elements essential for the establishment of a globally competitive medical manufacturing cluster.  The result of this research is a bold plan that aims to secure continental as well as international buy-in, thereby ensuring that the cluster is well positioned to support the manufacturing of different elements that form part of the broader pharmaceutical and medical product value chain in Africa.

The Competitization of the OR Tambo SEZ Pharma and Medical Cluster

The cluster-based approach is globally acknowledged as an effective approach to enhance economic growth and development.

For it to be competitive, any cluster must pursue and ensure the existence of linkages between different elements that form part of the production process; these include basic inputs, manufacturers, role players that approve the products for consumption and those that move the goods to market. Equally important are the research, development and innovation institutions.

The OR Tambo SEZ’s planned pharma and medical manufacturing precinct will have all the above inclusive of a variety of medical production processes such as pharmaceutical mixing, medical device component manufacturing, sub-assembling, labelling and packaging, warehousing and storage, training, standard testing, patent compliance and regulatory approval institutions. 

Through this approach, the SEZ, which already boasts of a competitive location, is destined to become a world class pharma and medical products manufacturing destination. 

Available Incentives

As a designated Special Economic Zone, the OR Tambo SEZ will also provide manufacturers that are looking to set up operations with the opportunity to access incentives that reduce the cost of production; this is particularly key, given that manufacturing costs remain a major impediment in the enhancement of manufacturing in Africa.

Available incentives include duty-free importation of production-related materials and assets as well as VAT exemption on exports. 

OR Tambo SEZ: The Competitive Choice

Underpinned by factors such as a skilled labor force, South Africa has long been a location of choice for multinationals looking at Africa. The country also has an established supply chain to foster the medical manufacturing expansion.

All the above, coupled with Gauteng City-Region’s competitive positioning serving as a gateway to sub-Saharan Africa, make the OR Tambo SEZ an ideal location for the production, export and trade of pharmaceutical and medical products within Africa.

For more information on the pharmaceutical and medical cluster being developed at OR Tambo International Airport SEZ, visit: www.ortambosez.co.za