Medical disposables manufacturing
Medical disposables manufacturing
Business Model Description
Establish facilities assembling first aid kits and manufacturing medical disposables, such as syringes and tests.
Expected Impact
Strengthen healthcare coverage especially for communities that do not have direct access to advanced health facilities.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Case Studies
Country & Regions
- Uganda: Central
Sector Classification
Health Care
Development need
Uganda has a major challenge with SDG 3 - Good Health and Wellbeing, particularly indicators such as high maternal and neonatal mortality rate.(I) The index for inequality-adjusted life expectancy within the Human Development Index (HDI) framework is only 0.481, positioning Uganda as 160th in the HDI country ranking.(II)
Policy priority
Through the National Development Plan, government has increased spending on social sectors namely healthcare and education. However more investment will be required to provide basic but high-quality social services, especially in healthcare. Uganda plans to devote USD 7 million for human capital development which includes healthcare.(IV)
Gender inequalities and marginalization issues
More than half of females in Uganda are estimated to experience sex-based violence, usually from their life partner. According to the World Health Organization (WHO), the problem of violence against women is country-wide and present in all parts of the society.(V)
Key bottlenecks introduction
Uganda has achieved 75% geographical coverage of the population living within a 5 km access of any facility providing health services for communicable diseases. However, the functional coverage is much lower in reality. This is caused by insufficient coverage of comprehensive services, especially specialty and diagnostic services.(IV)
Medical Equipment and Supplies
Pipeline Opportunity
Medical disposables manufacturing
Establish facilities assembling first aid kits and manufacturing medical disposables, such as syringes and tests.
Business Case
Market Size and Environment
< USD 50 million
Uganda's 2018 imports of medical needles, catheters, cannula, syringes was estimated at USD 8 million, while the market for blood tests is estimated at almost USD 3 million.(2)
Uganda imports approximately 90% of its essential medicines and health supplies, mainly from Asian countries.(3) This creates an opportunity for domestic manufacturers to satisfy part of that demand.
Indicative Return
20% - 25%
The benchmark return on equity is 19.8% to 23.8%, based on cost of equity data for the subsector including a country risk premium.(19)
The estimated internal rate of return (IRR) for a syringes manufacturing facility is 25.21%, based on a case study from another emerging market.(20)
The estimated net profit margin is 18% for a project producing 31,200 medical first aid kits per year.(6)
Investment Timeframe
Short Term (0–5 years)
Based on a case study from another emerging market, the average construction period for a syringes manufacturing facility is approximately 1 year, with an estimated pay-back period of 4 years.(20)
Market Risks & Scale Obstacles
Market - Highly Regulated
Capital - Limited Investor Interest
Market - High Level of Competition
Impact Case
Sustainable Development Need
Medical equipment is a substantial asset in the healthcare delivery system that must be managed efficiently. Further, how it is purchased, managed and used can influence the quality of healthcare delivered to patients.
89 million masks, 76 million gloves and about 1.6 million goggles are required globally for the COVID-19 response each month.(1) Uganda was among the first recipients of personal protective equipment (PPE) supplies from the World Health Organization (WHO), but the supplies are rapidly depleting.(17)
Medical disposables are vital for ensuring large-scale healthcare delivery and preventative actions. With disruptions in international transport, increasing domestic production capacity is important. Additionally, companies in Uganda (i.e. Takataka Plastics) are responding to the increased demand for PPE by transforming plastic into face masks, and at the same time recycling plastic.(21)
Gender & Marginalisation
According to WHO representatives, "Health services have a crucial role in responding to violence against women," which is a country-wide and persistent problem in Uganda. Therefore investments in the sector are likely to support fighting this problem.(22)
Expected Development Outcome
Improved quality of medical services, improved healthcare
Increased opportunities for fast at-home treatment, improved safety of communities with difficult access to healthcare
Reduced imports which improves the trade balance
Gender & Marginalisation
Treatment options at home and early responses to emerging diseases are expected to particularly benefit women.
Primary SDGs addressed
3.b.3 Proportion of health facilities that have a core set of relevant essential medicines available and affordable on a sustainable basis
9.2.1 Manufacturing value added as a proportion of GDP and per capita
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Outcome Risks
Increased pollution due to manufacturing, increase in plastic waste (25)
Improper waste management leading to environmental destruction (24)
Impact Classification
What
Production of disposable medical equipment to improve healthcare performance.
Who
Hospitals and health clinics together with the staff being a central element of healthcare sector; population of Uganda benefitting from improved healthcare delivery.
Risk
Low availability of resources, possibility of cheap imports from China that may affect the business.
Impact Thesis
Strengthen healthcare coverage especially for communities that do not have direct access to advanced health facilities.
Enabling Environment
Policy Environment
Uganda Health Sector Development Plan 2015/16 - 2019/20: This plan addresses the challenges faced by the health system, and outlines priorities and key areas for medium-term investment, for both public and private partners.(12)
Global Health Development Agenda: This document establishes a 10-year vision for healthcare. It includes an assessment of the state of the world's health, the challenges and the gaps and the role of the World Health Organization (WHO) within that context.(13)
National Health Policy: This policy focuses on health promotion, disease prevention, early diagnosis and treatment of diseases. It prioritises the more effective delivery of the Uganda National Minimum Health Care Package (UNMHCP), efficient use of resources, improving public-private partnerships and strengthening of health systems.(15)
To address the problem of violence against women, in 2016 the Ugandan Ministry of Gender, Labour, and Social Development developed the National Policy on elimination of gender-based violence in Uganda.(22)
Financial Environment
Fiscal incentives: Operators in industrial parks or free zones are exempt from income tax.(10) Exemptions from all taxes are available under the 5th schedule of the East African Community Customs Management Act 2004, particularly on: examination gloves for laboratory and medical use.(11)
Regulatory Environment
National Medical Equipment Policy: This policy establishes a list of standard equipment for healthcare facilities, its management and recommended specifications, as well as the acquisition process.(7)
The Ministry of Health coordinates and assesses purchase of equipment and furniture in public facilities. Drugs, supplies, and equipment in the private sector are either purchased directly or through donor program channels.(9)
National Drug Policy and Authority Act Cap. 206: This Act establishes a national drug policy and a national drug authority to ensure the availability of drugs and safeguard the appropriate use of drugs.(8)
Uganda National Bureau of Standards defines guidelines on specific criteria for medical disposables that must meet to be accepted in healthcare facilities.(23)
Marketplace Participants
Private Sector
AAR Health Care Holdings, African Development Bank (AfDB), XSML, Medical Credit Fund, Kaglon Medical Supplies, Goodwill Lab Supplies
Government
Ministry of Health, local governments, Ministry of Defence, Ministry of Internal Affairs, Ministry of Gender, Labour and Social Development. The Ministry of Health coordinates and governs the various actors and provides oversight.
Multilaterals
International Monetary Fund (IMF)
Target Locations
Uganda: Central
References
- (I) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. (II) United Nations Development Programme. Briefing note for countries on the 2019 Statistical Update: Uganda. (III) Government of Uganda (2016). Review Report Of Uganda’s Readiness For Implementation Of The 2030 Agenda. (IV) National Planning Authority. National Development Plan III (NDPIII) 2020/21 – 2024/25. (V) World Health Organization (2017). Making health services a safe place for women: Uganda steps up to support women subjected to violence. https://www.who.int/news-room/feature-stories/detail/making-health-services-a-safe-place-for-women-uganda-steps-up-to-support-women-subjected-to-violence
- (2) United Nations Comtrade database.
- (3) Export.gov (2019). Uganda - Market Opportunities. https://www.export.gov/apex/article2?id=Uganda-Market-Opportunities.
- (4) International Finance Corporation. The Business of Health in Africa. Partnering with the Private Sector to Improve People’s Lives. https://www.unido.org/sites/default/files/2016-01/IFC_HealthinAfrica_Final_0.pdf
- (5) Compass (2014). Afford I and II Projects. https://www.thecompassforsbc.org/project-examples/afford-i-and-ii-projects
- (6) Uganda Investment Authority (2016). Compendium of Investment and Business Opportunities. https://www.ugandainvest.go.ug/wp-content/uploads/2016/02/Compendium-of-Investment-and-Business-Opportunities-Vol-2.pdf
- (7) Ministry of Health. National Medical Equipment Policy. http://library.health.go.ug/publications/equipment-and-supplies-inventory/national-medical-equipment-policy
- (8) Government of Uganda (1993). National Drug Policy and Authority Act 1993 (Ch 206). http://faolex.fao.org/docs/texts/uga104984.doc
- (9) SWECARE. Uganda Health Sector and Partnership Opportunities. https://www.swecare.se/Portals/swecare/Documents/Uganda-Health-Sector-and-Partnership-Opportunities-final.pdf
- (10) PwC (2019). Corporate - Tax credits and incentives. https://taxsummaries.pwc.com/uganda/corporate/tax-credits-and-incentives
- (11) Uganda Revenue Authority (2019). A Guide on Tax Incentives /Exemptions available to the Uganda Investors.
- (12) Ministry of Health (2015). Health Sector Development Plan 2015/16 - 2019/20. Uganda, http://npa.go.ug/wp-content/uploads/2016/08/Health-Sector-Development-Plan-2015-16-2019-20-1.pdf
- (13) World Health Organization (2020). Global Health Agenda. https://www.who.int/about/vision/global_health_agenda/en/
- (14) National Planning Authority (2020). National Development Plan III (NDPIII) 2020/21 – 2024/25. https://www.fowode.org/publications/research/40-national-development-plan-3/file.html
- (15) Ministry of Health (2020). Second National Health Policy 2010. http://library.health.go.ug/publications/policy-documents/second-national-health-policy-2010
- (16) City Population (2020). Uganda. http://www.citypopulation.de/en/uganda/cities/
- (17) World Health Organization (2020). Shortage of personal protective equipment endangering health workers worldwide. https://www.who.int/news/item/03-03-2020-shortage-of-personal-protective-equipment-endangering-health-workers-worldwide
- (18) Thomson Reuters (2020). Ugandans melt plastic waste into coronavirus face shields. https://news.trust.org/item/20200611002521-u8gf1
- (19) PwC analysis based on Prof. A. Damodaran data, 2020.
- (20) Precise Ethiopia. Profile on the production of medical syringe. https://preciseethiopia.com/download/publication/business_opportunities/Profile%20on%20the%20Production%20of%20Medical%20Syringe.pdf
- (21) Thomson Reuters (2020). Ugandans melt plastic waste into coronavirus face shields. https://news.trust.org/item/20200611002521-u8gf1
- (22) Ministry Of Gender, Labour And Social Development (2016). National Policy on Elimination of Gender Based Violence in Uganda. http://ngbvd.mglsd.go.ug/docs/2838GBV%20POLICY%2031st%2007%202019%20Final..pdf
- (23) Uganda National Bureau of Standards (2020). Uganda Standards Catalogue. 30 June. https://unbs.go.ug//attachments/menus/27/Uganda%20Standards%20Catalogue%20as%20at%2030%20June%202020-Final-2020-10-25.pdf
- (24) World Health Organization (2018). Health-care waste. https://www.who.int/news-room/fact-sheets/detail/health-care-waste
- (25) United Nations Conference on Trade and Development (2020). Growing plastic pollution in wake of COVID-19: how trade policy can help. July. https://unctad.org/news/growing-plastic-pollution-wake-covid-19-how-trade-policy-can-help