Cipla’s Durban factory reopens after looting

Medicine manufacturer Cipla’s Durban factory reopens on Thursday, just more than a month after rioters vandalised and looted the factory on 13 July. This factory produces tablets to the value of more than R1.2 billion every year.

The facility produces a variety of medicines for different therapeutic categories and most notably, anti-retrovirals for people living with HIV.

The building itself was vandalised, with windows and doors broken and some of the equipment was also damaged, says Paul Miller, Cipla CEO.

He says it is really difficult to assign a specific value to the looted stock.

“It obviously involves the costs associated with repairing the facility after it was vandalised and replacing stock, but we are still experiencing other ripple effects of this incident that affected our business.”

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Biggest job

The biggest job was to get the factory cleaned up again to a standard where medicine could be produced.

“It is a complex process and not as simple as just fixing the damage. We also cannot simply just start producing medication at this facility once the structural damage had been repaired.

“Therefore, Cipla employed five contractors to fast-track the intensive clean-up operation and reparation process so that a Good Manufacturing Practices [GMP] certificate could be issued for the facility.”

Plan B

After the looting incident, Cipla implemented adequate contingency measures, such as leveraging its global supply chain and other manufacturing sites to ensure continuity of medicine supply, especially for key therapeutic areas such as anti-retrovirals.

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“From a stock perspective, Cipla also had a good amount of buffer stock in our other distribution centres across the country, which helped to mitigate all possible supply disruptions. We are still busy quantifying the cost of this incident.”

Miller says that security measures were also re-evaluated to ensure the safety and well-being of its people and the facility. More than 500 people are employed at the facility.

“Our staff has been actively involved in various ways to help with the intense clean-up process at this facility and put plans in place to get it operational again as quickly as possible.”

Proudly South African

He says that Cipla did not consider leaving the country after the looting.

“Regardless of the circumstances, we are committed to delivering on our ethos of ‘caring for life’ and we are a proudly South African business.”

Cipla also has another plant in Johannesburg, but the Durban factory was vital because local manufacturing is very valuable for the company.

“Localised industry is one of the most effective stimulators of economic growth and job creation. Therefore, as a proudly South African pharmaceutical manufacturing company, Cipla focuses on an ‘Africa for Africa’ strategy.”

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Miller says that actively creating employment and skills development opportunities results in more than just economic growth.

“It is providing better health for our patients and securing socio-economic wellbeing for our communities.”

He points out that the manufacturing industry in particular stimulates more economic activity across society than any other sector.

“This globally recognised multiplier effect creates employment opportunities, demand for resources, investment and development opportunities.

“This invaluable stimulus impact on economic growth is attributed to the many significant links between manufacturing and most other sectors in the economy. We embrace the importance of building our country’s self-reliance and commit to contribute to the South African economy through innovative partnerships with government to ensure and sustain this.”