GSK to Invest in New Factories and Drug R&D in Africa
March 31, 2014 2:56 PM EST
GlaxoSmithKline (GSK.L) plans to make new investments in additional factories and drug research in Africa, its chief executive said on Sunday, as the pharmaceuticals group broadens its bet on promising emerging markets.
The logo of GlaxoSmithKline (GSK) is seen on its office building in Shanghai
Andrew Witty said the continent was important for the British company's long-term growth, adding that the investment would create jobs and build up healthcare capacity in a key region.
"The transformation of Africa into a successful growth region is one area that we need to focus on," Witty wrote in the Sunday Telegraph newspaper.
Witty will set out details of GSK's multimillion-pound investment plans for Africa at a conference in Brussels on Monday.
Sub-Saharan Africa currently accounts for only around 500 million pounds of GSK's annual sales, which totalled 26.5 billion pounds in 2013, but the group sees potential for significantly greater sales in future as African economies grow.
In particular, new opportunities are opening up for treating chronic diseases afflicting the middle classes, rather than just fire-fighting infections.
Non-communicable diseases like heart disease, lung disorders, diabetes and cancer are expected to account for 46 percent of all deaths in sub-Saharan Africa by 2030, up from 28 percent in 2008, according to the World Bank.
GSK has been stepping up its exposure to many of the world's developing economies by increasing local sales forces, striking deals and buying out minority shareholders in certain subsidiary businesses.
Last week it took full control of its consumer healthcare unit in Indonesia, after recently increasing its stake in local units in India.
Witty has made emerging markets a key growth platform for GSK and has stuck with the strategy despite recent problems in China, where sales have been hit by bribery allegations.