Akums Drugs & Pharmaceuticals signs a JV with Zambia govt to set up a pharma manufacturing plant by 2028. Akums holds 51% stake; Zambia commits to $50M medicine purchase. Aimed at boosting local production & exporting to Southern Africa.
Delhi-Based Firm to Hold 51% Stake in $50M+ Project, Aiming to Boost Africa’s Pharma Independence
New Delhi, India / Lusaka, Zambia – In a strategic move to expand its global footprint and support healthcare in Africa Akums Drugs and Pharmaceuticals Limited has entered into a landmark agreement with the Government of Zambia to establish a pharmaceutical manufacturing facility in the country. This joint venture (JV) represents a significant step towards enhancing local medicine production and reducing dependency on imports in the Southern African region.
Joint Venture Structure and Investment
As per the exchange filing released on August 22 Akums will hold a majority stake of 51% in the JV with the Zambian government retaining the remaining 49%. Both entities will invest in the facility and commercial operations in proportion to their shareholding. The facility is expected to be operational by 2028 and will manufacture a diverse range of products, including:
- General oral solids and liquids
- Injectables
- Beta-lactam products
Strategic Objectives and Market Impact
The project aligns with multiple strategic goals:
- Boosting Local Production: The facility aims to enhance Zambia’s domestic pharmaceutical manufacturing capabilities, supporting the government’s national health programs.
- Supply Commitment: The Zambian government has committed to purchasing medicines worth $50 million over two years (2026-2027) from the JV, with products initially supplied from Akums’ Indian facilities.
- Regional Expansion: Beyond serving Zambia, the facility plans to export to neighboring countries, including Botswana, Malawi, Mozambique, Namibia, Tanzania, and Zimbabwe, positioning Zambia as a pharma hub in Southern Africa.
Financial Performance and Market Response
Akums’ expansion announcement comes on the heels of its Q1 FY2025 results:
- Net Profit: ₹63.48 crore (up 5.50% YoY)
- Sales: ₹1,024.03 crore (up 0.48% YoY)
Despite solid financials, the company’s shares closed at ₹480.90 on August 22, reflecting a 0.19% decline and an 11.10% drop over the past month. The market’s cautious response may be attributed to the long-term nature of the Zambian investment and broader economic factors.
Why This Matters?
- Reduces Import Dependency: Africa imports over 70% of its medicines. This JV will strengthen regional supply chains and improve medicine accessibility.
- Supports “Make in Africa”: The project echoes India’s “Make in India” ethos while supporting Africa’s push for self-reliance in pharmaceuticals.
- Economic Diplomacy: This collaboration underscores India’s growing role as a global pharma leader and partner in Africa’s development.
Challenges and Opportunities
While the project promises significant benefits, it also faces challenges:
- Infrastructure Development: Setting up a facility in a new market requires navigating logistical and regulatory hurdles.
- Long Gestation Period: The 2028 operational timeline means returns on investment will be delayed.
However, the Zambian government’s offtake commitment and export potential offer substantial long-term opportunities.