Catalyst Principal Partners push for local pharmaceutical production

Private equity firm Catalyst Principal Partners has recently acquired a majority stake in pharmaceutical manufacturer Zenufa, based in Tanzania, under its Catalyst Fund I fund valued between $5 million and $20 million. The move aims to address the significant gap in local pharmaceutical production in Sub-Saharan Africa, where only 25 to 30 percent of medical products are manufactured locally. Martha Osier, Investment Manager at Catalyst Principal Partners, highlighted the rationale behind the investment, emphasizing the robust growth in the healthcare sector driven by rising incomes and disease incidence. Osier explained that supporting local manufacturers like Zenufa allows for control over the value chain, ensuring consistent quality of medicines and mitigating the risks associated with imported products, which may often be substandard or expired. By promoting local production, the firm aims to guarantee the availability of high-quality pharmaceuticals for consumers in the region. The push for local pharmaceutical production is a strategic move to cater to the growing healthcare needs in Sub-Saharan Africa. Despite 70% of the estimated $3.8 billion pharmaceutical market in the region being sourced from abroad, Osier believes there is room for both local and foreign manufacturers to thrive. With a growing young population and urbanization trends, the demand for healthcare products is expected to escalate, presenting opportunities for local businesses to participate in the market. In addressing the skills gap within the industry, Zenufa has been actively recruiting biotechnology graduates in Tanzania, with plans to continue expanding its workforce. By investing in local talent and upskilling programs, Catalyst Principal Partners aims to contribute to job creation and sustainable development in the region. The company's focus on local recruitment is supplemented by its readiness to deploy expatriate resources when necessary. Looking ahead, Catalyst Principal Partners sees potential in expanding its investments across East Africa, with a keen interest in exploring opportunities in countries like Rwanda. By leveraging Zenufa as a platform, the firm aims to establish partnerships with existing manufacturers and distributors in the region, supporting the growth of local pharmaceutical production. With a commitment to fostering a robust healthcare ecosystem in Sub-Saharan Africa, Catalyst Principal Partners' investment in Zenufa demonstrates a strategic initiative to address the challenges of quality medication access and local economic development in the region.