CHEMICAL PROCESS TECHNOLOGIES: Innovation and Combined Capacity Leave CPT Uniquely Positioned

Established in 2001 and now consummately staffed by 74 permanent employees, Chemical Process Technologies (CPT) is a private chemical synthesis company within the animal health industry, also supplying fine chemicals to various other industries. The company specialises in the synthesis of several fine chemicals and formulates numerous end-user products, which are exported currently to countries in Europe, South America and Africa.

“The combined capacity,” opens MD Hannes Malan, “to synthesise active pharmaceutical ingredients (APIs) and formulate products positions CPT uniquely, in the Southern African animal health context.” CPT is, additionally, the parent company of CPT Pharma, which was granted a licence by the South African Health Products Regulatory Authority (SAHPRA) to manufacture APIs for human medicine back in August 2020 in a significant leap forward for the SA pharmaceutical industry.

“CPT animal health, meanwhile,” explains Malan of the key distinction between the two entities, “is focussed on the manufacturing of the active ingredient as well as the conversion or manufacturing of final products – a combination of chemical synthesis and contract manufacturing.”

ACTIVE GROWTH

“CPT is an innovative chemical synthesis company: we pride ourselves on our capacity and ability to develop and commercialise competitive organic synthesis routes.” CPT has the capacity to synthesise various molecules, Malan describes, and in developing its own process technology there is a great emphasis placed on current and environmentally responsible processes.

Typical chemical manipulations include oxidation, amidation, alkylation and heterocyclic chemistry, while technology for the commercial manufacturing of water-based nano-materials also exists within the company.

“We are in the process of commercialising another API,” Malan reveals, “and somewhere in the region of 75% of the way through developing the technology for a further three which we would like to manufacture locally and then export.” On the API side there are significant opportunities for growth. The number of animals in South Africa is staying largely the same,” he reasons, “and as a result, from a final product point of view, the market is almost fixed.

“We are still able to improve our market share, nonetheless, by providing our renowned excellent service and also by means of the quality system that we have implemented and embedded within the company.

“From a growth perspective, however, there is not a lot of expansion left, but where we do still see a lot of possibilities and prospects is in the provision of active ingredients,” Malan says of the company’s priorities. “Because these are not used only in South Africa, but also in a fair number of other countries in the Southern Hemisphere, that is the area on which we are arguably most keenly focussed, in order to commercialise the technologies that we have developed as quickly as possible so that we can supply more and more to these countries.”

Such idiosyncratic specialisms are going to prove ever-more crucial to distinguishing CPT from the strong players around it on both of the distinct arms of the business. “On the formulation side, it is with local formulators for final product that we are having to compete,” Malan assesses. “Again, the quality systems that we have implemented are really important in keeping us ahead.

“Multinational companies have the same quality system and standards on the animal health products as on the human side, and we have moved a long way down that route ourselves. We are in the process of executing a project to upgrade one of our facilities to be GMP-compliant – set to be executed by Q3 of this year – which will set us apart from any of our competitors in South Africa at this moment, most of whom are still adhering to far more lenient local regulations.

“This willingness to invest and continually improve our systems will stand us in excellent stead, and the GMP facility will also open up further export opportunities which are currently not available to us.”

MAINTAINING COMPETITIVENESS

Malan also highlights the flexibility built into CPT’s manufacturing system as crucial to the success of the company’s formulation side. “Although it comes at a price,” he admits, “we also understand that our business is seasonal, and it is almost impossible to forecast when rain will come and therefore when customers will need our product. This makes things difficult, as the lead times on a lot of the raw materials that we import can be anything from six to 12 weeks, and opportunities do not wait around for this sort of timescale.

“We have built and tweaked certain aspects of our business to give the flexibility to ensure that we continually have enough of those required raw materials in place, aided by good relationships with our suppliers assisting us in short lead times for local deliveries. Our willingness to adjust our production plan to align with our customers’ priorities has, in turn, positioned us superbly well in the South African industry.

“From the chemical synthesis point of view, there is nobody else doing what we do in South Africa,” says Malan, of another vital differentiator. “Our competitors are all located in India and China. How we set ourselves apart from them is through the technology that we develop. We still have to import most of our raw materials from the same supplier that they are using, therefore our approach typically is to look at the molecule that we believe to be of value and then see if there is anything we can do around the technology to allow us to manufacture the product cost-competitively in South Africa.

“Having the ability to develop and commercialise technology is what we use to remain competitive against these companies,” Malan analyses. “Going through the process of scaling up and commercialising is a painful, challenging route, but we believe that it is the only real way to maintain independence and competitiveness from a chemical manufacture point of view.”

The last few years have, for CPT, been largely and mercifully free of the hardship and torment that has permeated around it. “For us, it has been good on the agricultural side – food supply has of course been very important and there have been very favourable conditions in the whole industry, with growth of around 24%, and we really benefited from that. We are still limited by the number of patients, of course, so our growth was modest, but still there.

“On the human side,” Malan closes, “what was most significant was the boom in interest in local manufacturing; we have had a lot of interest from the South African government, and also from donor organisations who would like to ensure the Africa’s independence when it comes to pharmaceutical products.

“From that perspective, too, it has been incredibly positive, and we have established a wealth of new relationships and a large number of projects across the API manufacturing sphere, and we are incredibly excited to explore these.”