IDC INVESTS R20 MILLION IN SA's FIRST BIOTECH FUND
Johannesburg - Thursday October 11, 2001
In line with the government's stated commitment to support the biotechnology industry, the Industrial Development Corporation (IDC) has invested R20-million in Bioventures, South Africa's first biotechnology venture capital fund.
Bioventures was launched in March this year with an initial capital of R40-million from its founding participants, Gensec Bank and Real Africa Holdings. The further R20-million injection means the fund has now reached its first closing and can embark on investing in suitable ventures. Final closing will occur on December 31, 2001.
Bioventures plans to invest in a range of companies across different sectors and at different generations of biotechnology. It will only invest in companies that have proprietary technology or exclusive access to such technology that gives them a competitive advantage. Bioventures also plans not to be over-exposed to one particular industry sector (such as agriculture or food processing).
Ron den Besten, who heads up Gensec Bank's private equity division, said that the investment reflected the IDC's commitment to supporting the world of New Technology. "There is no doubt from our perspective that the biotechnology industry has a vital role in the development and growth of our economy. Through this investment in Bioventures the IDC is pledging its support for advances in science and the establishment of new and
exciting businesses."
In outlining his proposed R182-million budget for biotechnology for the next year, Ben Ngubane, Minister of Arts, Culture, Science and Technology, effectively gave the Government's blessing to the fledgling biotechnology industry. He said that biotechnology would improve affordability of health care, provide nutrition at low cost and create jobs in the manufacturing sector.
The fund is being managed as a joint venture between Gensec Bank and Real Africa Holdings. Mr den Besten added that although biotechnology is still in its infancy in South Africa, with the support of the Government and a major investor like the IDC, Bioventures will be getting off the ground quickly.
"We are delighted with this investment from the IDC which is not only important from a capital point of view, but also psychologically. The IDC is one of the most important investors in this economy and we believe their backing will be crucial to our success. "
Bioventures' investments will take the form of practical solutions that will commercialise the resources and knowledge that South Africa has in abundance.
Mr den Besten pointed out that South Africa has some unique competitive advantages that will give the country the edge in biotechnology. These include a wealth of genetic resources, both animal and plant (the Western Cape has the richest floral kingdom in the world); a wealth and established history of traditional knowledge (particularly of medicinal plants); first world science capacity and equipment; low cost skilled labour; and low product development costs (estimated to be about 14% of that of the US and UK).
Dr Heather Sherwin, who will manage the Bioventures Fund, added that an attractive feature of biotechnology and its products is that it is easily exportable. "This is one of the reasons why we are so excited about the potential for South Africa. There are great opportunities for our developing successful new businesses in South Africa."