On September 24, CiplaQCIL will become the first privately
founded Ugandan company to list on the Uganda Securities Exchange —
arguably a milestone from its humble beginnings in Katwe slum.
The
sprawling compound at Luzira where the plant and offices for the giant
pharma now sit is a far cry from the congested slum of Katwe where it
started about 21 years ago.
Indeed, it is in Katwe that
Uganda’s most innovative artisans have emerged. Katwe is to many in
Uganda a legitimate university that graduates experience rather than
academic papers.
It is, therefore, no surprise that
none of the six founders of Quality Chemicals Ltd (QCL), the firm that
later partnered with the Indian giant Cipla to form pharmaceutical
manufacturing company CiplaQCIL, is a medicine graduate.
CiplaQCIL manufactures antiretroviral, antimalarial and hepatitis medicines.
The
founding directors of QCL, Francis Xavier Kitaka (who has since
retired), Edward Martin, Randall Teiney, George Baguma, Frederick Mutebi
and Emmanuel Katongole, initially set out to import generic drugs for
both humans and animals into the country.
“The story of Cipla Quality Chemicals started 21 years ago in
Uganda’s slum area of Katwe as a distributor of animal and human drugs,”
says Mr Katongole, the chairman.
“None of us six partners is a medical person, we were businessmen, we hired technical people to assist us,” Mr Katongole adds.
Dramatic turn
The
decision to focus on human medicine was driven by both business
instinct as well as a response to the real challenges of the time.
“We
chose to concentrate on human medicines because at the time the
prevalence rate for HIV/Aids was very high, at least 400 people were
dying of malaria on a daily basis and there was no one on the African
continent who was providing these much needed medical interventions
affordably,” Mr Katongole says.
He is keen to highlight the dramatic turn from agency to partnership with Cipla.
“The
turning point was between the late 1990s and early 2000s when we
started representing Cipla. We were their technical representatives in
Uganda and this was the time when the world was fighting hard to make
antiretrovirals available. We got a lot of support because the Ugandan
government was taking the lead in global advocacy, so we started by
seeking technologies that would enable us to produce the drugs here.
That is what led to our joint venture with Cipla. We were later joined
by two private equity firms,” Mr Katongole says.
Few
enterprises survive beyond their first birthday while even fewer keep
the same set of founding directors for 20 years — a feat that Quality
Chemicals has achieved.
CiplaQCIL is floating 657
million shares at Ush256.5 ($0.07) each in the IPO, which was launched
on Tuesday, August 14 and will run until Friday August 24.
Reaction
to the IPO has been largely positive, with financial markets experts
looking to its timing as the right dosage to pump new life into an
otherwise sluggish bourse.
“We congratulate CiplaQCIL
on taking this step up the financing escalator, which now increases the
company’s financing options. This is a clear sign of the confidence our
private sector has in the economy and in Uganda’s capital,” said Keith
Kalyegira, executive director at the Capital Markets Authority.
“The
benefits of coming to the market are immense — from capital raising
though corporate debt issuance and secondary public offers, to offering
an exit avenue to founder shareholders, and the immeasurable public
relations value that comes with being a quoted company. We are glad that
CiplaQCIL is taking advantage of these opportunities and we urge other
Ugandan enterprises and family-owned businesses with ambitious growth
plans, to consider market-based financing to fund their growth or
refinance the expensive debt they may have obtained,” Mr Kalyegira said.
A
poster at the company's front desk promoting the IPO invites people to
take up “an opportunity to share in success inspired by vision, driven
by excellence.”
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