Black economic empowerment pioneer Mvelaphanda could start construction of a state-of-the-art biotech facility in South Africa early next year, Mvelaphanda Holdings founder and executive chairman Tokyo Sexwale said yesterday.

Sexwale said work on the facility would begin early next year and should be completed in 18 months. He said the company was currently scouting the country for a site for the facility, saying it might be located near a port to facilitate export.

The facility will be built as a joint venture between Mvelaphanda and Indian firm Bharat Biotech International. It aims to research and manufacture affordable healthcare products like generic drugs. It will also develop and export vaccines to treat malaria and hepatitis, which are killers in both India and Africa.

"South Africa is a huge market for generic medicines and the facility could cater for the entire African continent and even Europe and Latin America," Sexwale said. He signed a memorandum of understanding with Bharat in India last week.

Unwilling to put a price on the facility, Sexwale said he expected the project to cost a tenth of what it would in developed countries. Bharat Biotech specialises in product-orientated research, development and manufacturing vaccines, biotherapeutics and biopharmaceuticals.

Krishna Ella, chairman of Bharat, told India's Business Standard that his company had set up its world-class facility for over R190 million and a similar size project would come up in South Africa as a part of the collaboration.

Estimates indicate that the South African facility would require an investment of between R180 million to R230 million.

Mvelaphanda and Bharat, which claims to be the largest biological facility in the Asia-Pacific region, have agreed to make a 50-50 investment in the facility.

"Money is not a problem at all. The South African government is serious about the project and state-owned financial institutions will extend full support for the cause," Sexwale told Indian media last week.

It has been suggested that the Industrial Development Corporation may take equity in the proposed Indo-South African venture.

"Mining remains Mvelaphanda's core focus but we have strategic investments that act as hedges. We have a policy of investing where we see cash and where it makes sense - rands and cents," said Sexwale.

Currently falling under Mvelaphanda Strategic Investments and Mvelaphanda Private Equity, the company's health and medical investments may be bundled into a new subsidiary Mvelaphanda Health.

Mvelaphanda was one of the first black companies to get involved in the private healthcare industry when it joined a consortium including Medi-Clinic to acquire 67 percent of the Curamed Group, a Pretoria-based hospitals company, in December last year.