The Ranbaxy Laboratories has acquired Be-Tabs Pharmaceuticals, the largest manufacturer of penicillin formulations in South Africa, at a price of Rs 500 million (USD 70 million), making Ranbaxy the fifth largest generic pharmaceutical company in South Africa. As part of this acquisition, Ranbaxy has concluded a Black Empowerment transaction with a community investment holding (CIH) group company.

Peter Burema, President of Ranbaxy's global pharmaceutical division, who signed the deal on May 4 said, "the acquisition of Be-Tabs will ensure that Ranbaxy develops deeper roots in SA and with a strong local flavour."

A key element of the Be-Tabs deal is that it gives Ranbaxy local manufacturing capability, making the company one of the few generics pharmaceutical companies to invest in and develop local manufacturing functionality.

Desmond Brothers, CEO of Ranbaxy South Africa, says: "the company's decision to manufacture locally will not only help to provide quality medicine at an affordable price to the Southern African market, but will also mean a further investment of approximately R100 million in the local economy."

Ranbaxy is also planning a major upgrade of the Be-Tabs manufacturing facility to bring its factories in line with new standards. With the re-vamp of the Be-Tabs facilities, the company expects to lead the way for generics manufacturing in South Africa.

The acquisition of Be-Tabs substantially strengthens the basket of products that Ranbaxy brings to the market, especially in the acute and over the counter product streams. The company expects to use the brand equity that Be-Tabs has acquired to leverage market share among wholesalers, pharmacies, dispensing doctors and consumers.

Ranjan Chakravarti, Ranbaxy's Regional Director Africa and Latin America, added: "Ranbaxy entered South Africa with a business model that aimed to meet the country's need for access to affordable healthcare for a wide cross-section of the population. This acquisition - with its market presence and substantive manufacturing capabilities - is another step towards achieving this goal."

Ranbaxy established a presence in South Africa in 1996 and has been rewarded with excellent growth in the past decade. The acquisition of Be-Tabs is expected to boost earnings by more than double.

Be-Tabs will remain an independent trading entity and will form one of the three companies within the Ranbaxy SA Group, the other two being Sonke Pharmaceuticals and Ranbaxy (S.A.) (Pty) Ltd.