XSML expands Ecopharm’s pharmacy outlets in Uganda

Today, XSML, the fund manager active in Central & East Africa, announced its third investment in Ecopharm Uganda to finance further expansion of its outlets and acquire a pharmaceutical wholesaler.

Kampala, Republic of Uganda, 1 November 2018

Ecopharm has a network of twelve pharmacies in Kampala, through which it provides branded pharmaceuticals, branded generic medicines as well as locally produced pharmaceuticals. In addition, Ecopharm sells over-the-counter medicines and personal care products. Ecopharm was started in 2008 by Idd Iwumbwe. Idd is a qualified pharmacist with over 19 years’ experience in running chain pharmacy businesses. Ecopharm’s pharmacies are strategically located on major roads in Kampala to enable easy access. Ecopharm targets the broad population of Uganda and distinguishes itself through quality, a broad range of products and personal service from a resident pharmacist at each outlet. This has led to a loyal customer base. The new financing is being used to open a new pharmacy at Mulago public hospital, the largest referral hospital in the country. In addition to this new outlet, Ecopharm is expanding in the pharmaceutical wholesale business by acquiring its sister company, Boots Pharmaceuticals Ltd. Boots Pharmaceuticals is active in the wholesale of selective branded generic pharmaceuticals in Uganda. Ecopharm has exclusive import arrangements with a number of European branded generic pharmaceutical manufacturers.

The African Rivers Fund (ARF) targets growing, well-managed small and medium-sized enterprises (SMEs) in the Central & East African region covering Uganda, Democratic Republic of Congo (DRC) and Republic of Congo as well as – over time – Burundi. The fund is named after the two most powerful rivers in Africa, the Congo and Nile Rivers, which embody the potential of the Central & East African region. ARF has made 21 investments to date, deploying over 75% of capital.

Jarl Heijstee, Managing Partner at XSML says: “We partnered with Ecopharm, one of the leading pharmacy chains in Uganda, over a year ago. With this new financing we are opening up the first privately managed pharmacy outlet at a public hospital in Uganda. This unique partnership is a win-win as Ecopharm brings affordable medicines closer to the patients and patients have access at affordable medicines at the hospital at which they are treated.”

Idd Iwumbwe, CEO of Ecopharm: “With the financing from XSML we have been able to accelerate our growth and capture this unique opportunity to start a pharmacy at Mulago hospital. As this new pharmacy is located close to the cancer and cardiology department, we are making sure that we stock the relevant, particular types of pharmaceuticals, which are hard to find in Uganda. Ecopharm works closely with the doctors at Mulago to ensure we provide the right type of medicines but also the right type of advice to have the best patient treatment.”

XSML believes that sustainable economic development in fast growing markets as the DRC and Uganda can be achieved by encouraging local entrepreneurship. Currently, many opportunities in these countries remain unexploited due to the lack of risk capital and support. By stimulating entrepreneurship, jobs and income are created. The African Rivers Fund continues CASF’s strategy with investments in between USD 100,000 and USD 5 million. Between the two funds XSML has provided technical assistance to over 35 companies to help them improve their operations and skills. Evidence of further impact can be found in various fields, with over 500 jobs created since 2011, over 4,000 additional pupils spread over three private schools and the addition of some 40 hospital beds, an operating theatre and maternity rooms in a clinic in Kinshasa, improving healthcare standards. All three investors in CASF (IFC, FMO and Lundin) were joined by Bio, CDC, DGGF, and Proparco for ARF.

About Ecopharm
Ecopharm Ltd is one of the leading chain pharmacies with twelve branches in Kampala. It was incorporated in 2008 by Idd Iwumbwe, a qualified pharmacist with over 19 years of experience in the pharmaceutical sector. Ecopharm provides branded pharmaceuticals, branded generic medicines, locally manufactured pharmaceuticals as well as over-the-counter medicines and personal care and beauty products. Ecopharm sells its products to a range of clients including individuals as well as hospitals, clinics and health centers.

About XSML
Although international investors show an increasing interest in emerging markets, the demand for finance from small and medium sized enterprises (SMEs) remains largely untapped.
XSML, eXtra Small Medium Large, founded in 2008, bridges this gap by investing in small businesses to help them grow into medium and large enterprises. XSML manages two funds with a focus on frontier markets in Central and East Africa: the Central Africa SME Fund and the African Rivers Fund. Our local teams of 14 investment and operating professionals have experience in emerging and frontier markets in private equity, corporate and development banking and corporate restructuring with offices in Kinshasa (DRC) and Kampala (Uganda).

For further information please contact:
T: +31 (0) 85 273 6029