Aspen Pharmacare Holdings Limited · JSE:APN
Aspen Pharmacare — Corporate Update (June 2014)
34 slides from Aspen Pharmacare's corporate update, June 2014
Slide 1: Investor Site Visit: Port Elizabeth Facilities
Aspen Investor Site Visit Port Elizabeth Facilities June 2014
Slide 2: Aspen
Aspen Aspen has a proud heritage dating back more than 160 years. The Group provides access to high quality, effective, affordable medicines and products in over 150 countries. 2
Slide 3: Strategic Manufacturing Partnerships
Strategic Manufacturing Partnerships Boehringer Nevirapine Ingelheim Lamivudine, Zidovudine, Combivir, GSK Epivir & Others BMS Stavudine, Didanosine, Atazanavir Gilead Tenofovir & Emtricitabine MSD Efavirenz Iroko Aldomet and Indocid Eli Lilly Cycloserine and Capreomycin Bayer Nur- Isterate Injectio
Slide 4: Aspen's Global Footprint
Aspen’s Global Footprint HoLbDING Ss
Slide 5: Aspen's South African Operations
Aspen’s South African Operations 5
Slide 6: Aspen Port Elizabeth Manufacturing Competitive Advantages
Aspen Port Elizabeth Manufacturing Competitive Advantages • Proven Ability to Supply High Volumes of Products on a Reliable and Consistent Basis: • The site has sufficient capacity to service existing markets and products that have been earmarked for transfer to the site. • Currently approximately 5
Slide 7: Evolution of Aspen's Manufacturing Base
Evolution of Aspen’s Manufacturing Base • Aspen Heritage Facility in Port Elizabeth has been on the present site for approximately 70 years. • Acquired by Aspen from South African Druggists in March 1999, together with facilities in East London and Johannesburg. • Mainly supplied the South African m
Slide 8: Aerial view of Aspen's Global Manufacturing Base in Port Elizabeth
Aerial view of Aspen’s Global Manufacturing Base in Port Elizabeth Technical Centre UNIT 3 : General Facility UNIT 2 : Oral Solids UNIT 4: High Containment Suite Construction UNIT 1 : Oral Solids Sterile Lyophillisation & Eye drop Facility Sterile Warehouse 8
Slide 9: Regulatory Authorities Relevant to South African Operations
Regulatory Authorities Relevant to South African Operations Regulatory Unit 1 Unit 2 Unit 3 SVP MP SVP HP East London ADC ACW Authority MCC (SA) X X X X X X X X FDA (US) X X X X X MHRA (UK) X X X X X WHO X X X X X TGA (Australia) X X X X X Anvisa (Brazil) X X X X X High volume solid Small to medium
Slide 10: Unit 1 – Oral Solid Dosage Facility
Unit 1 – Oral Solid Dosage Facility • In 2005, an investment was made in the construction of an FDA-approved facility in response to the HIV/AIDS pandemic in Africa. • Unit 1 currently manufactures 2.5 billion tablets/capsules, with the capacity to produce up to 6 billion tablets/capsules. • This fa
Slide 11: Flow Diagram of the Tabletting Processes
Flow Diagram of the Tabletting Processes Air Dispensing Fluidised Bed Scale Sieving Dryer Granulation Air Magnesium Blending Stearate Sieving Compression / Packaging Encapsulation Coating 11
Slide 12: Unit 1 – Oral Solid Dosage Facility
Unit 1 – Oral Solid Dosage Facility • The Unit 1 Packing capability includes: • Blister packing on three fully integrated blister lines of different capacities, with the capability of providing tamper evident, and uniquely identified individual packs on selected lines. • Bottle packing on three full
Slide 13: Unit 2 – Oral Solid Dosage Facility
Unit 2 – Oral Solid Dosage Facility • In Jan 2009 a second oral solid dosage facility, Unit 2, was constructed in order to provide additional flexibility for smaller batch sizes and to provide static bed oven drying capability. • The facility currently manufactures 2.5 billion tablets/capsules, with
Slide 14: Unit 3 – General Facility
Unit 3 – General Facility • Unit 3 is the original heritage facility which has been on the site in excess of 70 years. • In line with the rationalisation strategy, a phased process for the transfer of products to other facilities in the group is in process: • Semi-solids (creams, ointments & supposi
Slide 15: Unit 4 High Containment Facility
Unit 4 High Containment Facility • The facility will employ technologies that support the requirements for high levels of containment. • Investment of R604 million. • The facility will contain two dedicated and completely separate suites, namely the Hormonal Suite and the Oncolytic Suite. • Construc
Slide 16: The Steriles Facility
The Steriles Facility • Project commenced in 2007. • Specialist facility for the manufacture of eye drops, lyophilised vials and sterile injectables, including hormonal vials and ampoules (a niche capability to supply female contraceptives and HRT products). • The facility commenced with the product
Slide 17: Steriles Facility – Multi-Product Suite
Steriles Facility – Multi-Product Suite Lines 1 and 2 • High volume eye drops with an annual capacity of 42 million units. • In excess of 30 million units being exported to US and Canada under a manufacturing contract with Prestige Brands. • 2.5 million units of the Aspen’s Eye Gene range have also
Slide 18: Steriles Facility – High Potency Suite
Steriles Facility – High Potency Suite Line 4 • High volume ampoule filling capability for hormonal injectables - a niche capability for filling and packing oily solutions. • Annual capacity for 30 million ampoules. • Validation batches of Bayer Nur-Isterate have been completed. Commercialisation of
Slide 19: East London Site
East London Site General Facility Oral Contraceptives API Store 19
Slide 20: East London Multi-Purpose Site
East London Multi-Purpose Site General Facility • Highly flexible, small volume, solids manufacture, including low dose drugs. • The East London facility is the centre of excellence for the production of liquids and semi-solids. • Since 2009 Aspen has invested R228 million in projects to upgrade the
Slide 21: Port Elizabeth Manufacturing: Growth in International Volumes
Port Elizabeth Manufacturing: Growth in International Volumes 2011 2014 International International 13% 19% South Africa South Africa 87% 81% • Aspen Australia Products have been realigned Port Elizabeth: • 24 SKU’s have been commercialised. • 25 SKU’s are in the process of being transferred with ap
Slide 22: Keys to Performance
Keys to Performance • Leadership • Attention to detail • Planning and execution • Continuous Improvement • Philosophy: There is value to be extracted from every activity/area of the business. Everything can be done better, smarter, faster. Just because it works, it does not mean it can’t be better.
Slide 23: Milestones and Continuous Improvement Initiatives - Engineering, Safety, Health and Environment
Milestones and Continuous Improvement Initiatives - Engineering, Safety, Health and Environment • SA Operations achieved ISO 14001 and OHSAS 18001 accreditation in 2013. • Sophisticated air handling systems are in place to purify and filter the air discharged from the production areas. • Aspen achie
Slide 24: Continuous Improvement Initiatives – HR
Continuous Improvement Initiatives – HR • Individual and Team coaching and mentoring Orientation to Management leadership development programme Impact: Empowered leadership – improved productivity • Sick absence management through Return to Work interviews and absence trending/intervention Impact: A
Slide 25: Continuous Improvement Initiatives – Quality Control Laboratory
Continuous Improvement Initiatives – Quality Control Laboratory • Raman technology (Truscan Laser Spectrophotometry) Impact: Direct testing on material receipt Reduced sampling and labelling Reduced handling – at point of receipt Reduced laboratory testing – immediate identification vs. laboratory t
Slide 26: Continuous Improvement Initiatives – Production and Warehousing
Continuous Improvement Initiatives – Production and Warehousing • Doubling of batch sizes to reduce set-up time between batches and thereby optimise equipment utilisation Impact: Reduction of total annual set up time by 50% • Improved compression set-up and run-rate parameters Impact: Increased run
Slide 27: Continuous Improvement Initiatives – Production and Warehousing
Continuous Improvement Initiatives – Production and Warehousing • Use of multi-tip tooling in tablet compression Impact: Increased run rates Table showing improvement in efficiencies using multi-tip tooling: Product Previous Rate Current Rate % Increase Zyloric 100mg 120000/hour 240000/hour 50% incr
Slide 28: Continuous Improvement - Impact on Expenses
Continuous Improvement - Impact on Expenses • For the 2013/2014 financial year, as at April 2014, SA Operations (PE, SVP, EL and Nuts) achieved savings to the value of R36.6m. • Continued improvement savings achieved for Port Elizabeth: • Unit 1 Solids Manufacturing : R7.2m • Unit 1 Solids Packing:
Slide 29: Continuous Improvement - Procurement
Continuous Improvement - Procurement • Comprehensive understanding of products / materials, driving factors and market factors. • Ability to effectively benchmark product prices, quality and supplier service to ensure that we are procuring optimally. • Longstanding relationships have been establishe
Slide 30: SA Operations Competitiveness
SA Operations Competitiveness PE vs. Global 3rd Party Suppliers (ex works) Other material Conversion Total Average Reduction (based on a sample of 16 SKUs) -20% -44% -40% PE vs. Sigma (ex works) Other material Conversion Total Average Reduction (based on a sample of 28 SKUs) -46% -62% -53% 30
Slide 31: In-house Manufacturing Cost Analysis
In-house Manufacturing Cost Analysis Allocation of Production Costs (Including ARV's) Conversion Allocation of conversion costs Costs 32% Material Costs 68% Other 23% Labour Depreciation 57% 14% Electricity Allocation of production Costs 6% (Excluding ARV's) Conversion Material Costs 49% Costs 51% 3
Slide 32: Training and Development
Training and Development • Aspen has training programmes in place across all levels of the business, to support operational requirements. • The following training initiatives were successfully completed by employees in the 2013 and 2014: • Business Practice: 19 employees. • Warehouse Practice: 15 em
Slide 33: Risks and Challenges
Risks and Challenges • Realisation of awarded public sector volumes Mitigation: International volumes are being introduced to Port Elizabeth • Impact of inflation and currency movements on cost of goods Mitigation: Benefits from continuous improvement initiatives and effective procurement strategies
Slide 34: Conclusion
Conclusion Our world class South African Operations team has created Aspen’s sustainably efficient and competitive manufacturing platform. 34
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