The entire decade of the 90s was not any kind to Uganda in matters of health. It was the height of the HIV/AIDS scourge and the many diseases related to it. There was a very high mortality rate among children dying of killer diseases, not to mention malaria among others. The previous decade of the 80s had been marred with a lot of political uncertainty that hit the healthcare system pretty hard.
There were not so many hospitals to write home about. There were not many facilities that could easily help with availing medication to the sick. Medication was hard to come by.
It was against such prevailing challenges of the time that Rishi and his wife, Dr Meera Vadodaria found it important to establish a pharmacy that would avail medicines on the market at a very affordable price.
In 1996, Rishi Vadodaria, an MBA Graduate, together with his wife Dr Meera Vadodaria, a pharmacist established Rene Pharmacy Ltd to avail drugs on the market. They came to address a need. However, unknown to them, the need was bigger than what a pharmacy could supply. Drugs were pretty expensive. They had to be imported from India and China which was very costly. The fact that Uganda is a landlocked country did not save the situation. Secondly, the market that needed drugs was bigger than in Kampala. The need stretched out to the entire country and its neighbours.
Three years later, they decided to take the bigger leap to go into the pharmaceutical manufacturing space. The need to fulfil the health needs of Uganda and its neighbours was still immense. In addition, they wanted to avail quality but affordable drugs on the market. It was this concern that gave birth to the idea of setting up Rene Industries.
Locate in Kamuli-Kireka on the outskirts of Kampala, the capital city of Uganda. Rene Industries is one of the leading local pharmaceutical companies that produce quality generic and branded medicines. It is one of the big eight pharmaceutical manufacturers in the country contributing about USD 270 million to the government coffers.
Together with his wife, the Vadodarias have steered the company from nothing to the state-of-the-art facility that it is today. The pharma giant is the maker of 140 different products on the market and they have a product portfolio of 22 major therapeutic areas. Their products mainly include tablets, capsules, liquid, pessaries and beta-lactam preparations.
21 years later after its inception, Rene now employs over 500 employees across their different product value chains. After covering the Ugandan market, they have since expanded to cover the East African region especially focusing on the other landlocked countries; Rwanda, Burundi, South Sudan and the Democratic Republic of Congo.
According to Rishi Vadodaria during his interview with Marcopolis, only 20% of the revenue raised from the pharmaceutical industry is retained by the local market share. This is mainly because the industry is heavily saturated with medical products from India and China which are dumped on Uganda and Africa in general. This remains one of the stumbling blocks towards the growth of the industry locally.
In addition to this, Uganda is a landlocked country which makes it hard for the manufacturers that heavily rely on imported raw materials to produce drugs efficiently. There is a high cost of both time and resources lost in the transportation of the raw material and that lost in Mombasa and other handling ports. But road and sea freight is the cheapest option, compared to air transport which remains extremely costly. What the company saves on cost is however almost lost in time.
Kenya, given its access to the coast through the Mombasa port, can counter such challenges. It also explains why it is home to 30 big pharmaceutical manufacturers making it the biggest in the region.
The Opportunity of BUBU
In the recent past, the government of Uganda through the Uganda Investment Authority has been pushing for the Buy Uganda, Build Uganda (BUBU) campaign. The main objective for BUBU is to allow local investors to supply the market with homemade products. BUBU applies to all sectors.
In his Marcopolis interview, Mr Vadodaria says “BUBU is encouraging the use of locally made pharmaceutical products which has improved the local demand for the products.” The government gave the local pharmaceutical manufacturers the right to produce 37 products which they could make locally. In addition, the local producers were given leverage to supply hospitals and health centres.
At the height of the COVID pandemic, pharma companies were given priority to produce and supply products like sanitisers, vitamin C and Zinc Sulphate tablets. Rene was the biggest supplier nationwide. Not only did they produce for Uganda but for South Sudan and Burundi as well, hence fulfilling their mandate of producing generic and branded medicines for Uganda and beyond.
The future and succession planning
At the start, Rene Industries was only run by Rishi and his wife Dr Meera. Along the way, they introduced their daughter Khushboo Vadoria who is the Operations Director. As such, today, the company is run by three directors who also happen to be the founders; Rish Vadodaria, the Chairman and Managing Director, Dr Meera Vadodaria, as Director and Khushboo Vadodaria as the operations director.
Khusboo, like her mother, is a pharmacist. She is a graduate of the University of Nottingham. She also holds an MBA from the London School of Finance and Business. Before coming back home to work at Rene, Khusboo worked as a pharmacist in the UK for seven years.
It is this expertise and skill that she brings to Rene in her capacity as the director of operations. In addition to overseeing the operations, she is in charge of the firm’s finance and production, media and public relations.
Speaking to Marcopolis, a delighted Khushboo couldn’t help but express her excitement about the future. “We are focusing on building capacity and ensuring that there is a consistent supply of essential medicines to the government, local market and the export market.”
The optimistic director also notes that there is a growing demand for lifestyle sicknesses-related medicines on the market such as antihypertensives and cardiovascular drugs and antidiabetic drugs. Rene is channelling its efforts to have those locally manufactured.
The firm also looks at widening and introducing more manufacturing plants to be able to cater to the ever-growing need, especially as they launch out to supply more countries. Recently, the medicine giant added Zambia to its list of ever-growing export markets.
The COVID19 Pandemic was a good time for pharmaceuticals as there was a growing demand for locally manufactured medicines both locally and in the region. Rene Industries saw a 20% growth in their production, something they attribute to BUBU. Khushboo is hopeful that this kind of growth is likely to propel the company’s turnover to double and triple in the next five years.
The company exports its products to South Sudan, Rwanda, Burundi, Kenya and the Democratic Republic of Congo and more recently, Zambia. As part of their ambitious plan to produce high-quality essential medicines, they are widening their market reach, especially in the Eastern and Southern African region.
The pharma giant is committed to manufacturing more quality affordable drugs given they are the largest generic manufacturer in Uganda employing 500 employees across the different production value chain. They want to extend the same muscle in serving the region and beyond.
“Women comprise more than 52% of our workforce, and being a woman myself, we’re very passionate about empowering women to reach a higher economic potential. We hire an array of chemists, pharmacists, engineers and skilled personnel,” Kushboo told told UK’s Business Focus in a September 2021 interview.
Whereas the pharmaceutical space has registered tremendous support from the government, there is more that ought to be done. Khusbooo highlights that there are still high taxes on pharmaceutical equipment. This has slowed down the expansion and innovation process as it is so costly. But all in all, Kushboo is optimistic about what the future holds.
“Our company has been very lucrative. We have seen a growth of 20% just in one year, and during a pandemic no less. We will see how the pharmaceutical and essential medicine sector pans out when it comes to growth. When it comes to strengthening local production, Uganda is on the right track,” she told Marcopolis in an interview.
“ In five years, the turnover for the company will double and triple. We would look for foreign investors. If something is interesting to us, we would welcome them with open arms. Having another perspective and another counsel would help drive the company to grow even further. We are open to any possible partnerships, investments, and possible ideas of investment”, adds Khushboo.
“I would like to take the company further and increase our export markets, and obviously, just grow the company as much as I can. There is a figure that I have in my mind. We definitely want to increase our growth and we need to increase our product lines to meet these capacities. We want to take over the entire region. My dream, for now, is to export to at least 90% of all the countries in the East African region and the sub-Saharan region, including the DRC and we are working on that slowly. Currently, we are exporting to South Sudan, Rwanda, Burundi, and we are working on Zambia as well as we speak. I would like to open up more and more markets and you never know what the future holds. We might even open another industry in another country”, she adds.
Rene is a member of the Uganda Pharmaceutical Manufacturers Association and the Federation of East African Pharmaceutical Manufacturers (FEAPM).
On what keeps her motivated, Kushboo says that it is the continuous learning and the satisfaction that she is contributing to the family legacy.
“A family business is definitely one of the more complex structures in business. Together with business acumen, strategy, and all of the business-related activities, there is an element of emotion involved. Since I joined the family business, there has been a continuous learning curve and it has been a very positive experience. My father has a lot of experience and every day we learn so much from him. With the knowledge that he has gained through years of experience, I still have quite a long way to go with stepping into his shoes. But because the stakes are in our favour and we own the company, it drives us to work harder. I work harder every day to save the company money or to be more streamlined with the logistics because any delay in production delays time to market, delays business, etc. Because it is personal, I work harder that way. It is my motivation, my drive to work harder every day. Also, because it is a family business and we are just three directors (my mother, my father, and myself) we make decisions very quickly. That drives the company to improve the processes and there is no hindrance from the outside”, says Khushboo Vadodaria.
This story is an adaptation of the conversation between the Vadodarias with Marcopolis for their Uganda Report. MarcoPolis is an international online publishing company headquartered in Paris, specialized in producing executive interactive business reviews by country analyzing trends, featuring sector analysis, interviews, companies, videos and top stories.