Malaria is a major killer in developing countries. In 2006, Tanzania reported 11.5 million cases of malaria and many more cases go unreported. Malaria is attributed to inhibiting economic growth by as much as 1.3% per annum in countries where infection rates are high.

Shelys is a Tanzanian pharmaceutical manufacturer, specialising in over-the-counter products. The company benefitted from a five year investment from  CDC’s fund manager Aureos which was successfully exited in 2008. Shelys produces a range of pharmaceutical products including generic anti-malarial drugs.  Aureos assisted Shelys in acquiring the Kenyan company Beta Healthcare, significantly growing its distribution footprint in East Africa. In addition, with Aureos’ support, Shelys constructed a new state of the art manufacturing plant to replace its facility in Tanzania.  

Shelys employs 550 people and complies with all local labour legislation as well as the International Labour Organisation’s fundamental conventions. Basic wages for all staff exceed the national minimum and staff receive uniforms, housing and transport allowances as well as one free meal a day.

Although Tanzania has no formal codified environmental requirements for the pharmaceutical sector, Shelys has worked to ensure that World Health Organisation (WHO) standards on effluent discharge are met. With Aureos’ support, Shelys has  made the following improvements to its operations:

• Separate drainage facilities for waste water to ensure safe effluent discharge.
• Reduced dust and particle emissions by introducing a high efficiency particulate air filter which meets EU standards.

Production standards at Shelys are in process of being raised to World Health Organisation (WHO) good manufacturing practice (GMP) standards. While WHO GMP is not required for drugs sold in Tanzania, improving production standards has provided access for Shelys to markets in eight countries across Central and Eastern Africa.

With guidance from local fund manager Aureos, Shelys introduced tighter financial controls and improved corporate governance with the creation of new board committees for oversight.

Shelys leading position in East Africa, coupled with improvements in manufacturing standards an improved corporate governance, persuaded Aspen Pharmacare, sub-Saharan Africa’s largest pharmaceutical manufacturer to acquire a majority stake in Shelys as part of its African expansion strategy. This is a clear example of how ESG improvements go hand in hand with the business and investment case.