Carnelian

active

Procaps (“Procaps” or “the company” - http://www.procapslaboratorios.com ) develops, produces and markets packaged pharmaceutical drugs and advanced drug delivery technologies (i.e., softgel capsules). The company has seven production facilities located in Colombia, El Salvador, and Brazil with distribution capabilities in twelve countries in Latin America including Ecuador, Peru, and Bolivia. In Colombia, it has (a) two plants, viz. Procaps flagship facility and Rymco, located in Barranquilla; and (b) two plants, Alinova and Pharmayect, located in Bogota. In El Salvador, it has two operations, Laboratorios Lopez and Biokemical, both located in San Salvador; and in Brazil, it has a plant, Softcaps, located in Cotia, Sao Paulo. •Procaps’s flagship facilityis in a 34,000 m2 site in Barranquilla, which manufactures primary as well as secondary pharmaceutical products. Within the same premises, in a separate building but operating independently, Naturmega processes fatty acids and botanical products on multi-dosage forms such as liquids, creams, powders, hard gelatin capsules and tablets. Naturmega is not part of the scope of this project. •Rymco, located at approximately 200 m from the flagship facility, is a single-use medical products 10,613 m2 plant that manufactures disposable syringes, catheters, medical apparel, and other products for the pharma industry. •Pharmayect is in a 4,500 m2 site within the East Industrial Park in Bogota. It manufactures syringes, pipettes, injection vials, sterilized powder products, blisters and vials. •Alinova is in a 1,000 m2 site, also in an industrial area in Bogota. It producespharmaceutical and nutritional gelatin products (vitamins, minerals, fiber, probiotics, etc.) packaged in sachets, gummies and individual packages. •Laboratorios Lopez, located in a 22,276 m2 site, manufactures about 355 primary and secondary pharmaceutical products for medical prescription, popular consumption, and generics. Procaps acquired Laboratorios Lopez in 2014. •Procaps acquired Biokemical in 2015. Located in a 2,218 m2 area, Biokemical commercializes solids, injectables, tablets, semisolids, liquids and soft gels. Softcaps specializes in the contract manufacturing of soft gelatin capsules (gel caps) for the pharmaceutical, nutritional supplements, and cosmetics industries. The site is located in an industrial complex, on a 9,034 m2 lot, with approximately 5,560 m2 of floor space. Procaps’ operations in Barranquilla and the operations in El Salvador have communities nearby the facilities. Both Pharmayect and Alinova in Bogota and Softcaps in Brazil are located in industrial areas with no presence of nearby communities. The proposed project includes an IFC equity investment of US$ 90million to support the Procaps capex program. The capex includes building and operation of new greenfield manufacturing plants, expansion of existing production plans, investments in new technologies, and brand acquisition activities (the “project”). The activities planned under the project comprise of the following: •At its flagship facility in Barranquilla, the company expects to increase its hormone production lines, improve the operations to comply with British Medicines and Healthcare Products Regulatory Agency (MHRA) rules, conduct general improvements in the facility such as optimizing the liquid and packaging operations, and making R&D investments for further products development. •At Rymco, the company anticipates building a new plant to produce medical clothes and developing new brands. •In Bogota, at Pharmayect, it anticipates building two new production plants, one for lyophilized products and the other for penicillanic products, as well as duplicating the capacity of ampoule fabrication (from 5 to 10 million units / month). In addition, Pharmayect will set up new production lines for glass vial production, install a new water treatment plant to reduce energy consumption, and implement a new energy generation system. •At Alinova, it anticipates expanding its production, vials, manufacturing and packaging facilities. •In El Salvador, it is considering combining the Laboratorios Lopez and Biokemical operations into an industrial area. For Laboratorios Lopez, it anticipates increasing its capacity by 35% for solid and liquid forms and by 10% in the other dosage forms; and at Biokemical it anticipates increasing its capacity by 20%. •For Softcaps in Brazil, it anticipates expanding the gel caps manufacturing facility to increase annual capacity to 1.8bn capsules/year, as well as expanding the packing line, the R&D and quality control facilities.