Merck sells manufacturing operations in South Africa

By Alexandria Pesic

- Last updated on GMT

Related tags: Africa

Merck sells manufacturing operations in South Africa
Merck South Africa, a subsidiary of German pharma giant, Merck KGaA, has sold its Merck Pharmaceutical Manufacturing (MPM) operations in Johannesburg to investment firm, Nkunzi Investment Holdings.

A second South African investment company, Omame, has also acquired a significant stake in the deal which will see MPM’s employees and management team instantly transferred to newly formed company, Nkunzi Pharmaceuticals, in which they will become shareholders.

Nkunzi Pharma officially began trading on May 3, 2011, as a company within the Nkunzi Investment Holdings group.

Merck SA managing director, Klaus Boehm, said the company were happy to have completed the deal with Nkunzi, and looked forward to a mutually beneficial relationship in the future.

Global strategy

Merck claims the decision to sell its MPM operations in South Africa forms part of a long-term global strategy to ‘optimise​’ its manufacturing site network as it seeks to make savings.

In a portentous interview with South African online news site, businesslive.co.za​, in April, Merck’s chairman, Frank Stangenberg-Haverkamp, hinted that the company was ‘refocusing’ ​its strategy across the continent – including the future of its manufacturing operations.

“South Africa is the focus for sub-Saharan Africa. But it is dangerous to say that it will become a production platform,” ​he said.

Positive results

News of the sale of Merck’s MPM facility in South Africa comes after the company posted positive financial figures for Q1 2011.

Merck claims its total revenues for the period increased by 22 per cent to €2.9bn, driven largely by its Merck Millipore division in the US.

Karl-Ludwig Kley, CEO of Merck KGaA, said the company had laid strong foundations for the year ahead.

“Merck generated a solid performance in the first quarter and we are off to a very good start for the year, mainly driven by the strength of our Performance Materials and Merck Millipore divisions,” ​he said.

“We continue to expect the increase in the group’s 2011 result will remain as stated on February 21, namely 35 to 45 per cent.”

Related topics: Ingredients

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