Site visit to our African Operations April 2019
African Regions business positioning: leading distributor of pharmaceuticals & CPG in Southern, East & West Africa
Historical context Jan 2013: Entered Healthcare industry with Oct 2010: Created African Regions extensive African footprint through Division by grouping cross- acquisition of RTT Medical border transport operating May 2013: Entered the Nigerian warehousing companies & distribution market through Nov 2010: Entered the Distributorship acquisition of 49% of MDS business (sales-focus) through Logistics acquisition of CIC Holdings (within Consumer Products Division) 2010 2012 2013 2014 – 2017 Feb 2014: Identified consolidation and rationalisation opportunities in Jul 2012: Consolidated all “Rest of cross-border transport Africa” capabilities in companies African Regions Division Mar 2014: Leverage Imperial Managed (CIC from ILCP) Logistics Africa capabilities to focus in Rest of Africa Mar 2014: Entered the pharmaceutical distributorship market in Nigeria through acquisition of Eco Health Sep 2014: Acquired 70% stake in Imres , Created a R12billion business in 9 years which provides sourcing and procurement services to NGOs donors and private organisations J July 2017: Acquired Surgipharm to expand our healthcare route-to-market capabilities into Kenya 3
How we are organised African Regions CEO: Johan Truter Eco Health Surgipharm CIC SADC East CIC Namibia Imres Managed Solutions Vijai Maini Joe Theart Divan Opperman Niek Zee Gerrie de Jonge Sherring Thekekkara Route to Market: Route to Market: Route to Market: Route to Market: Strategic Sourcing Value Add Logistics Healthcare Healthcare Consumer Consumer & Wholesaling Packaged Goods Packaged Goods Supply Chain Management Route to Market: Route to Market: Healthcare Healthcare CFO: Renier Engelbrecht CPO: Lucky Kolobe Healthcare VP: David Pritchard CIO: Willie Erasmus 4
Our African Regions division at a glance Working with brand owners across the continent Deep experience More than 150 000 m² of Established the first world- Delivering premium brands by in navigating warehousing, strategically providing fully integrated, end-to- class pharmaceutical the complexity, diversity & placed at over 100 sites warehouse facilities of their end RTM solutions for the unique distinct on the continent challenges of the kind in East & West Africa distribution requirements of the African continent African market Unique The principal trades in a Distribute c.80% of distributor Specialising in multi-channel risk-free environment as we ethical pharmaceutical approach solutions for delivering essential supported by local trade in Nigeria & take full responsibility for partnerships & medicines & consumer health benefitting c.20% in Ghana the debtor’s book products from exclusive relationships with principals Distribution network into all Customisable solutions We conform to all channels, with a pharma network across the value network, regulatory & compliance into hospitals, pharmacies & including all logistical & standards government institutions, as well as sales functions all formal & informal consumer Delivering markets HIV/AIDS medicine to 16 countries 5
Compliance & quality Meeting the needs of both client & consumer Local partnerships Governance & compliance Currency management • We give brand owners informed • Well tested & coordinated • Highly proficient in access to consumers through our strategies for managing managing unpredictable extensive in-country networks governance & corporate exposures, unexpected costs, compliance evolving exchange control • Extensive on-the-ground regulations, international expertise, resource, capability & • We remediate, monitor & political, legal or system risk & geographic spread; uniquely manage risks in addition to numerous trade barriers in day- placed to mitigate & manage the coordinating the utilisation of to-day business operations distinctive risk & complexity of people, process & technology the African continent to improve effectiveness & help manage costs $ 6
Our footprint Pharma & healthcare logistics & supply chain management Pharma distributors (full RTM solution, including sales function) Pharma & medical supplies (wholesaling) (project work across multiple territories) Managed Solutions in East and West Africa, SA & SADC Logistics & supply chain management (various industries) Consumer distributors (full RTM solution including, sales function) In-country operations Countries serviced by agents 7
Healthcare positioning Why healthcare in Africa? Growth opportunities Growing population & middle class has seen Strengthened relationships with brand principals Fast facts – our positioning the demand for pharmaceuticals & related through direct channel development, demand healthcare products continue to grow across activation, inventory optimization, late Delivers 500 million patient packs • Africa localisation / labelling / kitting, serialisation & authentication annually to 50 000 delivery points, Patient affordability necessitates Increasing market diversity of product needs >50 000m² world-class warehousing • route-to-market efficiency & accelerates the into oncology, non-communicable diseases & Proven legitimacy & strong brand shift towards lower cost generics biopharmaceuticals • recognition > 20 years relationships Reliance on in-country logistics & Category expansion into animal health, with multinational principals, donors surgicals, consumables & devices using existing route-to-market service partnerships increases capabilities in current markets & regulators Donors transition spend to local suppliers Integrated solution offerings including Sound governance • international freight & transportation & governments are increasingly engaging Sophisticated systems • management to augment our market leading specialist service providers with proven abilities, distribution management & route-to-market systems & capacity Simplify & shorten supply chains • capabilities Scale through multi-market aggregation • Growing demand from governments & Geographical expansion through acquisitions & multi-market aggregation of smaller scale funders for transparency, governance, African markets compliance & product authentication 8
End-to-end value chain in Healthcare Providing end-to-end services across the healthcare value chain (between regional markets and continents) Driving patients’ access to affordable, quality assured medicines Representative office 2 & Quality control Table top vendor 10 Control tower 3a 15 Consolidation operations Order confirmation India • Europe • Bond Customs storage clearing Pharmacy 1a Global Supply 5 6 7 8 13 Ex-Pharma factories 14 Merchandiser India • China • 3b Regional Europe • Consolidation Hospital USA • Operations Dubai • 11 11 Ghana Product Analyst reports • Forex repacking (for principals) Kenya • trader • SADC Wholesaler 1b 4 Product Product Sourcing registration / Procurement India • China • Europe • Serialisation – Authentication – Product Quality Verification Blockchain – Control Towers – Visibility – Analytics - Transparency 9
Consumer Packaged Goods positioning Why consumer packaged goods? Growth opportunities Rapidly urbanising population across Africa; Strengthened relationships with brand principals Fast facts – our positioning offers strong growth potential & increasing through direct channel development, demand consumer buying potential activation & promotions and inventory Proven legitimacy, good operational • optimization governance controls & strong brand Continued expansion of formal retailers into Integrated solution offerings including recognition the market increases consumer choice & international freight & transportation management Extensive distribution footprint in • drives globalisation of brands to augment our market leading distribution management & route-to-market capabilities African countries Transition from traditional channels to more Expansion of capabilities into contract operations 2.5 million CPG deliveries annually • such as repackaging formal models to drive strong governance & > 50 000 delivery points compliance & reduce illicit trading R60 billion of product delivered to retail • In South Africa, further retail supply chain Geographical expansion through acquisitions & outlets consolidation & focus on improving route-to- multi-market aggregation of smaller scale African market efficiencies necessitate the markets rationalisation of the CPG distribution market Continued economic pressure, reduced volume, increased cost focus & shifting product mix all present opportunities for logistics outsourcing 10
End-to-end value chain in Consumer Packaged Goods Raw materials 1a Exports 5a Traditional retail Retail services Demand 2 Manufacturing 3 Finished goods 4 Wholesale 6 generation 7 Consumer 5b Informal retail Packaging 1b Imports
Key clients in Africa
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