IF SOUTH Africa is to improve its competitiveness in the global economy and create more jobs at home, it must foster more innovative entrepreneurs like Ashley Uys.
ys, who runs Real World Diagnostics, manufactures a series of rapid test kits which can help detect pregnancy, HIV, malaria and five different types of abusive drugs – including cocaine, tik and dagga.
In November he won R1 million from the SAB Foundation as first prize in its annual Social Innovation awards. The grant will help fund his new expanded factory in Brackenfell, Cape Town, which he moved into two months ago.
The example of Uys shows how industry, the government and universities can partner to improve innovation.
After graduating with a BSC in Biotechnologies with Honours from the University of the Western Cape (UWC) in 2003, Uys enrolled in a two-year incubation internship, run by Wits University, UCT and Acorn Technologies – a Cape Town based incubator which at the time was funded by the Department of Trade and Industry, but has since been absorbed by the Technology Innovation Agency (TIA).
He was then placed in a host company, Vision Biotech, where he was able to hone his skills, while the incubator footed half his salary.
Initially he spent two days a week working on his business idea, slowly stretching this as his sales began to pick up, until he was spending the bulk of his time on his own business.
At the time Uys was the only one in his class of 13 to opt to start a new enterprise during the internship. The remainder of his class chose rather to each write a business plan on how they would assist existing companies.
“I always wanted to be in business and be my own boss,” says Uys. “I always wanted to be an entrepreneur, but I wanted to stay in science.”
On completion of his internship he set up Real World Diagnostics in 2006 and moved temporarily to UWC which gave him office space and then to Muizenberg where he set up a small factory.
Instead of looking around of venture capital investments to fund the large capital outlay he needed for developing new tests, Uys opted to rather start small, initially just marketing his products and those of others, while outsourcing the manufacturing to a third party.
The only equity he has given away has been that in his manufacturing company, Medical Diagnostech, where he has given 14% to a UCT professor who he consults with and the remainder to one of his lab technicians, Lyndon Mungur.
In 2008 Uys won the national leg of the SAB Kickstart Competition and with it R200 000 in prize money and a further R125,000 in grant money, which he ploughed back into his business.
With the cashflow that he generated from distributing his products, as well as the cash he won through SAB Kickstart, he was able to start buying lab and injection mould equipment to begin manufacturing his own products, until in 2011 he was able to afford his own factory space.
Last year he exported over 2.5 million malaria test kits to Pakistan, Papa New Guinea and other countries via a distributor to the World Health Organisation (WHO). He also sells his kits to Alpha Pharmacies and local wholesaler Pinnacle Pharmaceuticals.
He says his new factory – which is five times bigger than his Muizenberg premises – will allow him to manufacture about 20 million test kits a year, and once his ISO accreditation is approved, he will begin shipping new HIV kits into the rest of Africa.
He claims it’s just he and his former host company that manufacture rapid test kits on the continent – with the remainder of the African companies in the sector simply assembling kits shipped in from overseas.
Each test kit ranges between R4 for a simple pregnancy test and R23 for a full drug abuse test that can test for five different types of drugs, and can produce results within five minutes.
Uys says the tests are 99.9% reliable in producing accurate results, but that it is still necessary to have results confirmed by medical-lab tests.
Along with the kits, he also produces a battery-operated breathalyser which he sells mainly to pharmacies as well as to SAB breweries, which distributes it to their staff.
Yet despite his advances, Uys two years ago learned a hard lesson about lawyers and contracts, when the Western Cape High Court ruled in favour of a UK businessman in an intellectual property (IP) dispute over the development of drugs and alcohol rapid tests. The case left Uys R300 000 out of pocket.
“I basically paid all that money for a practical course on law,” admits Uys, who says when he signed a contract with the businessman to set up a joint company, he made the mistake of not taking the contract to a lawyer first before he signed, because he trusted the businessman as a friend.
However just two months ago the businessman, came back to him and the two signed a contract, with the UK businessman this time settling for a 2.5% cut of sales for the first two years of sales.
Uys is now looking ahead. He says within the next five years he wants to be able to manufacture his own antibodies – which are used in rapid tests along with antigens – as he currently has to import them from the US. When he is able to do this he will be able to develop kits for any test possible.
He’s also developing a pre-diabetes test, which will be able to alert users on their chances of becoming diabetic, which will allow someone to make the necessary lifestyle and diet changes before the onset of diabetes.
Uys says he has gradually built up his business which has allowed him to re-invest income from sales back into his business.
Many business owners often make the mistake of dipping into their business’s income to cover personal expenses, but Uys is firmly against this.
“At the end of the day the only time your lifestyle should go up is when the company makes enough money to increase your salary,” he points out.
Strangely the incubation internship which helped Uys get started is no more. After the initial pilot, which he was part of, the department closed the programme. This surprises Uys.
“If it wasn’t for the internship I wouldn’t have had a business, so I don’t know why the government didn’t invest in something like that again.”
He points out that coming up with a new product involves hundreds of thousands of rands in development, making it vital that any would-be entrepreneur developing a product get all the support they can.
The best way for the country to develop more innovative businesses, he believes, is to have universities help commercialise intellectual property (IP) through business centres and incubators, with the support from government to help start a business.
“That’s where it all starts. It’s with formal education and then from the support of government to start your own venture. ”
This interview originally appeared in Business Day on 10 December 2012: http://www.bdlive.co.za/business/management/2012/12/10/science-innovation-passes-business-test
Stephen Timm is a