MSQ, Coega SEZ to build R100m medical device factory

29 August 2018

South African healthcare company MSQ Health is positioning itself to become South Africa’s third active pharmaceutical ingredient (API) manufacturer.

The company, which aims to become a market leader in a sector dominated by imports, has teamed up with the Coega Special Economic Zone (SEZ) to build a R100-million greenfield medical device factory. The new facility will enable MSQ to consolidate its two existing medical suture and textile manufacturing facilitiesinto one. It will relocate plant from its Cape Town and Port Elizabeth operations, while also investing in new machinery from Chinese technical partner, Zende.

COO and acting CEO Dr Carl Montaguesaid MSQ would start relocating machinery to the new facility by June 2019, with occupation set for September. The plant would be operational by October 2019. The facility, which will initially comprise a 5 900 m² manufacturing plant could potentially be expanded in future to include complementary and new businesses.

Because the manufacture of medical textiles and sutures is very labour intensive, the company envisages creating between 100 and 150 new jobs in a region where unemployment is high. MSQ currently employs around 400 people and hopes to double its head count by 2021, MSQ director Themba Nyembezi said.

According to Nyembezi, the local medical device industry is large but undeveloped with imports accounting for up to 90% of the market in value terms. He said MSQ was well positioned to change this dynamic. At present, 60% of MSQ’s output is sold into the private sector, mainly to large hospital groups. Just 10% is sold to the public sector. “This is an area in which we are keen to be active. It is driven by price, tenders and quality,” he said.

MSQ Pharma MD Glen Sullivanpointed out that, through this investment, MSQ was gearing up for the introduction of National Health Insurance (NHI) in South Africa which is expected to drive a higher proportion of local content.

with its ISO 9001 and 13485 accreditations, MSQ would be increasingly competitive in this space, he noted. Nyembezi said the facility’s location within the Coega SEZ, with its associated tax incentives, would enable the company to increase local content and grow exports.

MSQ has about 100 dossiers that allow it to manufacture and distribute generic medicines, as well as two revolutionary biological products, throughout South AfricaNamibia and Botswana.   

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