Wellness company Haleon South Africa has embarked on an ambitious plan to grow the local component of its supply chain as it seeks more space for its brands on the shelves of the country's burgeoning spaza shops.
Haleon produces a range of widely recognised brands, including Grand-Pa headache powder, Sensodyne toothpaste, Centrum supplements, Scott’s Emulsion (a dietary supplement) and Med-Lemon, a hot beverage used to treat flu and colds.
Farhan Haroon, Haleon's South Africa country manager, said the company was planning to invest R500m to enhance production capability and boost its already 80% local sourcing for production as other businesses importing raw materials into the country also sought to localise their production.
“In the supply chain 80% of our raw materials are sourced locally, and we have a localisation strategy to further invest in or develop suppliers that were there, that have maybe not been functioning, to get them up to speed. So that’s one of the things we’re going to be partnering on,” he said.
On a tour of its factory in Epping, Cape Town, which has 3,900 bays at 60% utilisation and exports to 13 countries in Africa, Haroon said Haleon planned to sell the iconic Grand-Pa product to the local market in smaller quantities to penetrate township areas. The factory is on track to produce over a billion Grand-Pa doses in 2025.
Collaboration is not optional. It is essential if we are to strengthen our health system, expand access and ensure that no South African is left behind. Africa’s production gap is well known
— Janine Fredericks, deputy director for advanced manufacturing at the department of trade, industry & competition
“Offering the two-stick Grand-Pa is about convenience. When you buy a 74-jar or 26-jar, you want convenience and ease of keeping it in your pocket. In terms of drop size, we want to reach out to the masses and the spazas and go deep into the country.”
He said Haleon was looking to provide a range of options for products in different quantities, such as Sensodyne toothpaste, which will have different tiers and gram sizes. The objective is to ensure its brands are available for every segment and in every size.
“There is downsizing and de-grammage. If there is price pressure, consumers will buy 70g instead of 100g. This is a normal phenomenon even without the inflation pressures around the globe.”
Cindy Carter, supply chain lead and site director at Haleon, said the company had made significant progress in localising even the manufacturing equipment that it uses to produce its various products, though the original equipment manufacturers (OEMs) of some machines were Spanish.
“In terms of equipment we use to produce, we have two liquid lines. One is locally sourced, and the sachet machines are locally sourced. There are also machines that are sourced from Spain, and OEMs that are bought from specialists. So where possible we try to source locally, and where needed we go to the top markets.”
Haroon recently arrived in South Africa from Pakistan to take over the company. He said he looked forward to familiarising himself with the local market and growing the presence of Haleon’s brands, particularly in township areas.
“I also got to know for the first time what a spaza is. And when they were telling me [some of these products are] being delivered to 30,000 spazas ... you know, spaza sounded like a space station. So I’m learning.”
Janine Fredericks, deputy director for advanced manufacturing at the department of trade, industry & competition, said the Covid pandemic made it clear that the government and the private sector must collaborate to boost vaccine and pharmaceutical manufacturing.
“That lesson remains with us. Collaboration is not optional. It is essential if we are to strengthen our health system, expand access and ensure that no South African is left behind. Africa’s production gap is well known.”
She said the continent carries 20% of the world’s disease burden but only manufactures 3% of medicines and less than 1% of vaccines.
“For South Africa, investing in local manufacturing addresses these challenges directly. It supports industrialisation, improves access to affordable products and strengthens public health security. At the same time, it creates jobs and skills that build a more competitive economy.”
According to a recent Stats SA informal sector report, the informal sector plays a crucial role in the economy, providing jobs and incomes for millions who struggle to find opportunities in the formal labour market, accounting for 19,5% of total employment in the fourth quarter of 2024.
“In 2023, the proportion of people aged 35—64 years running informal businesses increased compared to 2001. The most notable rise was seen among those aged 35—44 years, climbing from 27.9% in 2001 to 33.1% in 2023,” the report said.
Stats SA conducted a survey of employers and the self-employed in 2023, collecting information on businesses not registered for VAT. It found that 1.9-million South Africans ran non-VAT registered businesses in 2023, up from 1.5-million a decade earlier.
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