Medical supply's new BEE mover

Mercury Business Network
30 March 2005
By SUREN NAIDOO

KWAZULU-NATAL medical doctor and businessman Sibusiso Mhlambi is leading a joint venture deal with multinational medical devices company, Smith & Nephew, to launch Icembe Medical, a new BEE player in the sector. Fledgling black empowerment firm, Corez Investments - which is headed by Mhlambi - will hold a majority stake in the company, which is to be officially launched at a high-profile event in Durban on Friday. The BEE company is a first in South Africa in the medical devices arena and aims to make sophisticated healthcare available to the public sector. Speaking to The Mercury Network yesterday, Mhlambi, managing director of Icembe Medical, said the deal would go down as one of the most significant empowerment deals in the healthcare sector in South Africa.

Peter Duffy, Independent Newspapers

"This deal means a lot to us. Considering most of the big BEE deals take place outside KwaZulu-Natal, I am proud this deal has taken place in our home town."

Mhlambi said Icembe was the result of a three-year courtship with Smith & Nephew, when he joined the firm as a consultant, primarily on BEE matters. Last year he was appointed a non-executive member of the company's board.

According to Mhlambi, a majority 60% share of Icembe will be held by Corez - which is a 100% black "owned and inspired" investment firm. Smith & Nephew South Africa will hold a 30% stake with the firm's managing director, Kelvin Johnson, as a non-executive member of the board of Icembe Medical. The remaining 10% shareholding of Icembe has been reserved for the Icembe Medical Employees Trust. Mhlambi is the majority shareholder in Corez. Businesswoman, registered nurse and leading health activist, Queen Thandi Zulu, holds a minority share in company.

Although Mhlambi was loathe to give a round-figure value of the deal, he said it would grow to be worth up to R50 million. He said: "Icembe is looking to take the world-class medical technology from multinational companies and marry it with Corez's expertise in understanding and working within the context of the South African health market."

At present, Icembe Medical has source agreements with two major medical product stables, Smith & Nephew and BSN Medical Wound Care. It aims to ultimately hold exclusive rights for the distribution of these suppliers' products to state entities. Says Mhlambi: "Icembe Medical currently represents products that span the range from cutting-edge and technologically advanced endoscopy, orthopaedic and wound-care patient solutions, to products as simple as common Elastoplast. "Icembe Medical was created to get high-quality medical products and devices out of the international realm and on site, in a timely and cost efficient manner, to the healthcare providers and patients who need them."

The company hopes to accomplish this by using Smith & Nephews' international expertise and buying power in the multinational medical device and product marketplace, and linking it with Corez Investments' local expertise and knowledge of the South African healthcare situation. Said Mhlambi: "We want to be part of expanding the high quality of health services that were previously limited to private hospitals and aim to be rated as the most innovative and trustworthy provider of medical devices in our chosen markets."

Goal

He said an immediate goal of the firm was to increase its stable of suppliers. Mhlambi is a highly regarded physician. He also holds a Programme of Management Development qualification from the Harvard School of Business, was an honorary lecturer at the Nelson Mandela School of Medicine and is a trustee of Momentum Health. He said his vision was to see Icembe become a major player in the healthcare industry. Ray Buthelezi, sales and marketing director and executive board member of Icembe Medical, said the company would have its headquarters in Pinetown and would have a staff complement of 15 by May.