Merck (Pty) Ltd: Blending old traditions with the modern world

The pharmaceutical industry is dominated by global giants. Increasingly the African continent is becoming home to this multi-national corporations, with a particular focus on South Africa. Merck has business interests across the sub-Saharan region, offering customers a wide range of products – from innovative prescription drugs and over-the-counter medicines to life science solutions.
02227HIGH_MERCK_LOGOM_R_4_CThe company is one of the world’s leaders in innovative pharmaceuticals, life science solutions and cutting-edge performance materials and technologies. With a tradition spanning back over nearly 350 years, the company has forged a development plan with a strong focus on technology.

Globally, Merck has positioned itself as a leading pharmaceutical, chemical and life science company with four strong and dynamic divisions: Merck Serono, Consumer Health, Performance Materials and Merck Millipore.

Merck Serono is the largest division of Merck. It markets innovative prescription drugs to treat cancer, multiple sclerosis, infertility, growth disorders, and selected cardiovascular and metabolic diseases. Merck Serono’s products are primarily prescribed by specialists and largely manufactured using biotechnology.

The company’s Consumer Health division provides over-the-counter pharmaceuticals and focuses on a range of well-known brands that primarily address health themes such as mobility, women’s and children’s health, cough and cold, as well as everyday health protection.

The Performance Materials division provides high-tech performance chemicals for applications in fields such as consumer electronics, lighting, coatings, printing, plastics, and cosmetics. Merck has long been regarded as the market leader in liquid crystal mixtures for many years.

Merck Millipore is the world’s third-largest supplier of products and services for the life science industry. These are used by customers working in research and analytical laboratories as well as in pharmaceutical manufacturing.

Across the world, Merck employs some 39,000 people in 66 countries and has its global headquarters in Germany. Within South Africa, the company operates under the name of Merck (Pty) Ltd and has its regional head office in Modderfontein, Gauteng.

Merck has been operating in South Africa since 1970 and has, over the years, established itself as a supplier of choice in its target markets of pharmaceuticals, speciality chemicals and laboratory supplies, within the geographic area of southern Africa, with operations not covering 24 countries across southern and eastern Africa.

During the 2008 fiscal year the South African operation had a reported turnover in excess of R520 million, a figure which had risen to R661.5 million by 2011. The company reported that its pharmaceuticals business accounting for over 63 per cent of total sales. Merck reports that its pharmaceutical manufacturing facility currently produces a total of 12 million dosage units per annum.

The company’s pharmaceutical division provides medication for a broad spectrum of conditions including oncology, multiple sclerosis, fertility, endocrine (also known as thyroid diabetes) and cardio vascular diseases.

In addition, Merck provides a number of over-the-counter products through its Consumer Healthcare division, including: cold and flu remedies, supplements to keep people active, everyday health supplements, diabetic medication and supplements to help counteract iron deficiencies.

But there is much more to Merck than just pharmaceuticals – and the company also operates a highly successful Chemicals Division, which now includes dedication to Laboratory Supplies and Speciality Chemicals.

This division manufactures laboratory chemicals and reagents, effect pigments for the printing, plastics, coating and cosmetics industries, an innovative range of products for all phases of drug manufacture, active ingredients for decorative and personal care cosmetics, raw materials and salts for pharmaceutical and food production and OLEDs.

Merck, the world’s oldest pharmaceutical company, has an intriguing history, as its website explains: “Ourhistorical roots lie in Darmstadt, where Friedrich Jacob Merck acquired the Engel-Apotheke (“Angel Pharmacy”) in 1668. In 1827, Heinrich Emanuel Merck began the industrial-scale production of alkaloids, plant extracts and other chemicals.

“The successful export business in the United States led in 1887 to the establishment of a subsidiary in New York. Under Georg Merck, a grandson of Heinrich Emanuel Merck, Merck & Co. was formed in 1891.

“Following the confiscation of properties that took place as a result of World War I, Merck & Co. became an independent American company. The two companies are no longer linked to one another today – the only thing they still have in common is the name Merck. Merck & Co. holds the rights to the name within North America; outside this region the U.S. company operates as Merck Sharp and Dohme (MSD) or MSD Sharp & Dohme. Merck KGaA, in turn, holds the rights elsewhere in the world and operates in North America under the umbrella brand EMD, formed from the initials of Emanuel Merck, Darmstadt.”

Today, the operational business is managed under the umbrella of Merck KGaA, which is headquartered in Darmstadt, Germany. Approximately 30 per cent of the company’s total capital is publicly traded, while the Merck family owns an interest of about 70 per cent via the general partner E. Merck KG.

In South Africa, aside from its Modderfontein headquarters, there is a factory in Wadeville, Gaunteng and offices based in Cape Town, Durban, Port Elizabeth and Bloemfontein.

The company is ISO 9001-certified and has a strong focus on quality, health and safety – all of which stem back to the parent company’s core values of “Courage”, “Respect”, “Responsibility”, “Integrity”, “Transparency” and “Achievement” – which are the foundation and substance of everything Merck does.

In May 2011, Merck South Africa sold its Merck Pharmaceutical Manufacturing (MPM) operations in Johannesburg, to the black-owned investment company Nkunzi Investment Holdings, with a second investment company called Omame, also acquiring a significant stake.

The sales created a new business called Nkunzi Pharmaceuticals.

At the time (of the sale) it was reported that Merck’s decision to sell formed part of a long-term global strategy that aimed to optimise manufacturing through a process of streamlining, to create savings.

At the same time, Merck continued its commitment to Africa, and by the following February, the Merck-funded charitable initiative called the Global Pharma Health Fund, donated five mobile compact laboratories to the Zambian Health Ministry in the capital city of Lusaka to help detect counterfeit medicines.

The so-called Minilabs can be used to identify inferior and counterfeit medicines rapidly and reliably: emphasizing Merck’s commitment not just to the SADC region, but to quality assurance and drug security.

The donation was made by Karl-Ludwig Kley, Chairman of the Merck Executive Board, who was on a tour of the region, which also included visits to Tanzania and Zanzibar.

During the trip he learned first-hand about the progress being made in combating the tropical disease schistosomiasis. Merck has committed itself to eliminating the parasitic worm disease in Africa in cooperation with the World Health Organization (WHO).

Merck has over the years developed a comprehensive Corporate Social Responsibility programme. Global projects include the Merck-Praziquantel Donation Program and the aforementioned Global Pharma Health Fund.

Other projects in Southern Africa include the Alex Clinic (Alexandra Health Centre & University Clinic), which serves almost 800,000 people living in and around the town of Alex. The neonatal department delivers 10 to 15 babies, and treats up to 1000 patients a day.

Merck also supports the iThemba-Labantu – Lutheran Community Centre, based in Philippi, on the Western Cape. The hospice provides medical and psychological support to the community especially those affected by and living with HIV/ AIDS.

The Tomorrow Trust bursary scheme also receives support from Merck; its aim is to provide support to orphans through education, councilling and training.

Merck’s very long history is of course no guarantee for a long future, particularly in the current economic climate. However, the company remains committed to technology and innovation and has launched a change process called “Fit for 2018“.

Of this initiative, Merck says: “We are streamlining our organizational structure and at the same time aligning it specifically to current and future requirements. We are giving our strong divisions full business accountability. We are increasing our profitability and establishing clear guidelines with centrally steered corporate development targets. We are establishing a performance-oriented culture while promoting objective-driven thinking, engaged teamwork and efficient actions.

“Our shared ideas connect us. They are changing our company.”