Founded in Buffalo, NY in 1889, Mentholatum is a global health and wellness firm. Since 1988 it has been a subsidiary of the Japanese Rohto Pharmaceutical Company. We spoke to managing director of Mentholatum South Africa Uys Pretorius about the importing and distribution of its product range in Africa.
Pretorius is a veteran of the industry, having joined Mentholatum SA in 1989 when, as he jokes, “the fax machine had only just been invented!”.
Jokes aside, a lot has changed with the company in this time, with Mentholatum now enjoying its position as a major supplier and distributor of pharmaceuticals across South Africa and the southern part of the continent.
Pretorius goes on to introduce Mentholatum’s most famous product: “Deep Heat creams are the hero products in our stable, contributing the most to sales and profits. These are all currently imported directly from the UK. Previously these products were manufactured for us by Johnson and Johnson in their East London plant. However, manufacturing was moved to East Kilbride in Scotland in 1995 due to the construction of a new and more modern facility.
“We also import our Deep Relief range from East Kilbride. We also have local manufacturers like Wrapsa that produce an array of pharmaceutical products for us, including various tablets and cough syrups. Certain Deep Heat products like the sprays, bath tonics and shower gels are also produced locally.”
Although the main focus for Mentholatum SA is South Africa, there has been some expansion into neighbouring states. They distribute to their closer neighbouring states such as Namibia, Swaziland and Malawi. This expansion is being undertaken alongside its larger UK-based parent company, which also exports to much of the African continent. Mentholatum UK have a long standing relationship with Africa, including distributing to countries like Mauritius, Zambia and Kenya.
Mentholatum SA have posted robust growth figures year on year, proving that they have found their niche in a very competitive environment. “When Mentholatum just started, we averaged around R6million,” Pretorius says, “but we have gone from strength to strength, currently performing over the R100million mark. Some years we have shown a solid growth of up to 15%, but average around 10% year on year.”
A local focus
One of the most important aspects of Mentholatum SA’s business is localisation, both in terms of adapting existing products and in developing new or alternative ones to meet the specific demands of the market, as Pretorius explains:
“We have developed a number of products specifically for the South African market. This includes the introduction of Deep Freeze Arnica to complement the range, which goes hand in hand with our Deep Heat brand. We are constantly looking at what the market requirements are and adapt accordingly with formulation upgrades, using new and innovative ingredients, launching new formats, improving current formats and so on. However, the core of our business remains that which we bring in from our overseas companies.”
However, regulations remain something of an obstacle when it comes to product development. Pretorius goes on to describe the conditions in South Africa as “challenging” to the establishment of an R&D department in the area:
“The Medicines Control Council (MCC), our medicine control regulator, really struggles to cope with local demands and faces severe challenges on a daily basis. This really hampers progress especially getting new products into the market. Approval of new product development can take up to 3 years to materialize. Our markets demand sophisticated products and it does become a challenge for us to implement suitable formulations to meet these demands. Furthermore, to meet MCC requirements, we need to submit extensive documentation for approval – documentation and information that is not required in many other worldwide countries.”
As a result, much of the company’s R&D is instead conducted in Japan and the UK. These countries, says Pretorius, are just as stringent regarding quality but less bureaucratic.
Going forward, Mentholatum SA are planning to continue expanding into their neighbouring markets, including Botswana and some of the southern African countries. However, with the recent economic situations in South Africa, import and distribution businesses like Mentholatum SA are facing considerable pressure.
“Transport costs, fuel costs, electricity and water are all getting quite expensive – and these are but a few issues we see having a huge impact on the business, as well as major political and economic challenges,” says Pretorius. “We are in for a bit of a rough ride, but having said that, we have plans in place for the launch of a two new line extensions, both within the skincare category, so there is a lot to look forward to!”