Quality Chemical Industries, previously known as Cipla Quality Chemical, is in discussions to establish a new manufacturing facility dedicated to producing medications for tuberculosis (TB) and cancer. The company aims to expand its current portfolio, which includes HIV and anti-malarial drugs, by developing treatments for both infectious and non-communicable diseases.
Emmanuel Katongole, the chairman of Quality Chemical, announced on Friday that the new plant will play a significant role in the company’s commitment to combatting TB and cancer. He indicated that the company is exploring financing options from various interested funders, including banks and international organizations. “Banks have provided their terms, including Standard Chartered. Organizations like USAID have expressed willingness to fund us, and the Italian government has also shown interest. We are evaluating the best options available to us for this $50 million investment,” Mr. Katongole stated.
The establishment of this new plant marks a significant development for Quality Chemical following its acquisition by Africa Capitalworks in November 2023. The investment of $25 million by Africa Capitalworks allowed the company to acquire a 51.18 percent stake from Cipla India. This acquisition has led to a new strategic direction for Quality Chemical, allowing it to renegotiate its Technology License Agreement. This agreement enables the company to continue utilizing the necessary technology to fulfill its existing contracts and business operations. Additionally, it has maintained its Manufacture and Supply Agreement with the Cipla Group to ensure a steady supply of products and has established a Transitional Services Agreement for access to specific technology and databases essential for managing its business.
Quality Chemical is also preparing to launch seven new products by the third quarter of the next financial year, focusing on areas such as respiratory tract infections, anti-infectives, and metabolic health. Two additional products are expected to be released in the fourth quarter. The company’s performance has been bolstered by significant sovereign exports, which led to a revenue growth of 20 percent, totaling Shs265.3 billion in the year ending March. The reported profit improved to Shs31.8 billion, allowing the company to significantly reduce its debt.
Earlier this year, Mr. Katongole informed shareholders that strategic initiatives had enhanced operational efficiency and strengthened Quality Chemical’s position in sub-Saharan Africa. The company currently supplies products to 14 countries, with plans to expand its reach to 31 countries across the continent.
Quality Chemical has previously collaborated with the Ugandan government to construct a facility in Luzira, Kampala, where it has manufactured several new medications, including the first-line triple combination ARV therapy and two hepatitis B therapies. This plant has undergone expansion, increasing its monthly production capacity from 80 million to 130 million tablets.
