XSML makes further investment in Ugandan pharmacy chain

XSML, the fund manager active in Central and East Africa, announced its fourth investment in Ecopharm, the pharmacy chain in Uganda.

Since XSML’s first investment, Ecopharm has more than doubled its network to 15 pharmacies in Kampala and is aiming to add three more pharmacies with the new investment. XSML’s latest investment is in debt and equity as Ecopharm has a significant runway for further growth, given its competitive position in the Ugandan marketplace.

Ecopharm sells pharmaceutical brand products and generics as well as locally produced pharmaceuticals, including over-the-counter and personal care products. Ecopharm was started in 2008 by Idd Iwumbwe, a qualified pharmacist with over 20 years’ experience in pharmacy. Ecopharm’s pharmacies are strategically located in Kampala to enable easy access and target the broader population, distinguishing 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.

Ecopharm is also active in the wholesale of selected branded generic pharmaceuticals in Uganda. Ecopharm has exclusive import arrangements with a number of European branded generic pharmaceutical manufacturers.

XSML’s investment is done through its third fund under management, ARF III. The fund targets growing, well-managed small and medium-sized enterprises (SMEs) in the Central and East African region covering Angola, the Democratic Republic of Congo (DRC), Uganda and the Republic of Congo and surrounding countries. The fund is named after the two most powerful rivers in Africa, the Congo and Nile Rivers, which embody the potential of the Central and East African region.

ARF III follows the successful investment strategy of its predecessor funds, CASF and ARF, by providing debt, equity and mezzanine finance to fast-growing companies in these regions. Investors include BIO (Belgium Investment Company for Developing Countries), the Dutch Good Growth Fund (DGGF, managed by Triple Jump), FMO (the Dutch development bank), IFC (a member of the World Bank Group), Swedfund (Swedish development bank) and the SDG Frontier Fund (which includes private and institutional investors from Belgium).

Idd Iwumbwe, CEO of Ecopharm, said: “I am very excited that XSML now joins the company as shareholder. Over the last few crucial years, we have developed a close relationship based on trust and this way, we are assured of a committed shareholder who can help us reach our significant growth plan, while ensuring we keep a close eye on governance.”

According to Jarl Heijstee, managing partner at XSML, “Ecopharm is a good example of helping our existing clients grow and deepening our relationship by also taking an equity stake in the company. Ecopharm has a great market position and is poised to grow further in more rural areas of Uganda. It fits very well in our strategy to provide healthcare services to a wide range of the population and bring these affordable and quality services and products to the rural population of Uganda.”

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