Jan. 10 (Bloomberg) -- Adcock Ingram Holdings Ltd., the South African drugmaker that’s a $1.2 billion takeover target, plans to double its sales from African countries outside its home market to 1 billion rand ($92.5 million) within four years.
The maker of Panado painkillers and Corenza flu medicine wants those businesses to contribute 25 percent to 30 percent of total sales, Kofi Amegashie, Adcock’s managing executive for Africa, said in an interview with Bloomberg Africa TV to be broadcast tomorrow.
Adcock is looking to expand across the continent to take advantage of a growing middle class that can afford more formal medication and to improve its competitiveness against larger Johannesburg-based competitor Aspen Pharmacare Holdings Ltd.
Adcock rose 0.9 percent to 70.85 rand by the market close in Johannesburg. The stock advanced 31 percent last year, compared to a 59 percent gain for Aspen.
Nigeria is a “very important” market and Adcock is “keen” to develop its presence there through a combination of business startups and acquisitions, Amegashie said.
“We are being very judicious about who we select,” to buy in Nigeria, Amegashie said. Adcock may also look to build distribution centers in Nigeria and East Africa, he said.
The cost of doing business in Nigeria is as much as 30 percent more than in South Africa because of a lack of reliable power or roads, he said. Overhead costs in Kenya are 10 percent to 15 percent higher.
Adcock received an improved 12.8 billion rand cash and stock proposal last month from Chilean drugmaker CFR Pharmaceuticals SA, which wants to expand into other emerging markets. Bidvest Group Ltd., a Johannesburg-based operator of businesses including catering and car sales, has made an all-cash bid for 34.5 percent of the company.
To contact the reporter on this story: Janice Kew in Johannesburg at email@example.com