Saturday, July 12, 2014
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Africa is the next big thing in world economic development, GSK chief Andrew Witty says

GlaxoSmithKline CEO Andrew Witty said the company is continuing to expand in Africa because it is the next world region to have economic growth.

Africa is the next big thing in world economic development, GSK chief Andrew Witty says

Andrew Witty, chief executive officer of GlaxoSmithKline. (Associated Press)
Andrew Witty, chief executive officer of GlaxoSmithKline. (Associated Press)

As chief executive officer of drugmaker GlaxoSmithKline, Andrew Witty has brought jobs, cash, financing and intellectual property back to the United Kingdom.

But when he talks about his company's future, his focus often goes beyond the UK to emerging markets. And like some other global thinkers, he pointed to Africa as the next big thing in international economic growth.

"Africa is coming," Witty said. "It might not come the same way as India or China or Latina, but it is coming."

Witty spoke with reporters Wednesday when the company released 2012 full-year and fourth quarter financial results.

Glaxo is based in London, but has a facilities in Philadelphia, five other Pennsylvania towns and two in New Jersey. The Inquirer story with some of Witty's view of the move to the Navy Yard is here.

In January, the World Bank published its latest report on global economic prospects and that report said gross domestic product growth in sub-Saharan Africa remained "robust" at 4.6% in 2012. The report also said that excluding South Africa, the most globally integrated country in the region, GDP growth in the region was at 5.8% in 2012, with a third of countries in the region growing by at least 6%.

The 2012 GDP growth in the United States was 2.2 percent, according to the Commerce Department's Bureau of Economic Analysis.

A link to the full World Bank report entitled, "Global Economic Prospects," is here.

The World Bank report had all of the caveats that one might expect with the region, including the reliance on mineral exports for revenue, mineral rights for foreign investment, civil wars, governments in disarray and comparative lack of infrastructure. But it also had a note that would appeal to a manufacturer of drugs and health-care products.

"Some of the larger economies with a growing middle-class such as Nigeria, South Africa, Angola, Kenya, and Ghana, are increasingly attracting investment flows to their rapidly expanding consumer sector (e.g. retail, consumer banking etc)," the report said.

Glaxo distributes products in most African nations, but it already has facilities in Ghana, Kenya, Nigeria, South Africa and the North African countries of Morocco and Algeria.

In January, Allan Pamba, the director of engagement and access initiatives in GSK's Developing Countries Market Access Unit, told the Inquirer that Glaxo's deal with Vodafone was used to send text messages to new mothers to remind them to get their children vaccinated.

"There are half a billion handsets in Africa," Pamba said of the spread of cell phone use. "Some people don't have enough food, but they have a cell phone."

Like Witty on Wednesday, Pamba said in January that GSK spends 20 percent of its emerging market resources on helping host nations with health-care infrastructure, either directly or with non-governmental partners.

"If we don't help the government," Pamba said, "our medicines might sit on a shelf."

That earlier blog post is here.

Witty, who worked in South Africa in one of his stops before becoming CEO, said that Britain's history in India helped GSK establish its business there 100 years ago. Prescription drugs, over-the-counter medicine and other health-oriented products are distributed in less distinct ways in India and other emerging markets than they might be in Europe or the United States. GSK can use that experience to grow in Africa in a similar fashion before the rest of the world catches on and catches up.

"I hope we can develop a long-term position of trust," Witty said.

David Sell
About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com.

David Sell
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