Dubai-based private equity investor Abraaj has announced an investment in Vine Pharmaceuticals, the largest pharmacy retail chain in Uganda.
The investment is the first in the pharmaceutical retail and distribution sector for the Africa Health Fund in which Abraaj is involved alongside the International Finance Corporation, The African Development Bank, DEG, and the Bill & Melinda Gates Foundation.
It will help Vine to expand its reach and market share in Uganda's rapidly growing pharmaceutical market, where expenditure is growing at an annual rate of 13 percent and forecast to increase from the $268m spent in 2011 to $545m by 2014.
The Africa Health Fund, which was established in June 2009, aims to improve the access of low-income Africans to affordable, high quality health services while providing investors with strong long-term financial returns.
Vine Pharmaceuticals was founded in 1999 and has grown to be the largest Ugandan pharmacy retailer, with 21 stores, 98 employees and a pharmaceutical import business.
Abraaj said in a statement that it will support Vine in extending its branch network outside Kampala, and building the capacity of its wholesale distribution business serving clinics, hospitals and other pharmacies.
Shakir Merali, partner, The Abraaj Group, said: "Vine will be an important beneficiary of the continued growth in pharmaceutical expenditure in Uganda through both its retail and wholesale businesses.
"There will also be significant benefits for low-income Ugandans, with more consumers being put within easy reach of the basic health advice that a pharmacy can provide, and improvements to the availability of a comprehensive, up-to-date and affordable supply of drugs and other health products across the country."
Grace Munyirwa, founder and director of Vine Pharmaceuticals, added: "I am looking forward to taking the business to the next level with Abraaj's support.
"Their expertise in the health sector and their track record of helping to grow businesses by investing in operational improvements and more sophisticated business management systems will make them the perfect partners as we expand our presence across the country and develop our promising wholesale business."
The Abraaj Group also has stakes in the Philippines retail pharmacy chain HBC, and in Saudi Arabia's Tadawi Group, both leaders in their local markets.
Additionally, Abraaj has current investments in nine hospitals, as well as in pharmaceuticals, diagnostics, and medical devices manufacturing.