Business Meeting on Long-Lasting Insecticide Treated Net (LLIN) Technology Transfer

Abuja, Nigeria: August 22-23, 2007

Background: In 2005, NetMark invited all major Nigerian manufacturers and two National Agency for Food, Drug Administration and Control (NAFDAC) Nigeria staff to its LLIN Technology Meeting in Nairobi where international companies presented their LLIN technologies and international donors outlined the future demand for LLINs and the quality standards that would be required. Afterwards, companies in Tanzania, Ethiopia, and Kenya took steps to adopt LLIN technologies; however, there was almost no follow up by the Nigerian companies—or response to ongoing NetMark encouragement to invest in LLIN production. This business meeting was another NetMark attempt to break the Nigerian LLIN logjam and move manufacturers to LLIN production and remain relevant in the market, as most governments and donors are now only ordering LLINS. With the Nigerian textile industry undergoing a period of duress, LLIN production can supply growing markets in Nigeria and West Africa, where Nigeria is the only manufacturer of mosquito nets. The business meeting focused on several key questions:

• Who will buy Nigerian LLINs? NMCP described government/donor commitments on hand to buy 17 million ITNs/LLINs over the next five years, and NetMark noted the growing national and regional commercial market.
• Why should we make them? NetMark described the public sector preference for LLINs, the critical need for quality control, the WHOPES testing process, and how local manufacturers can obtain WHOPES in 6 months rather than 24 if they exactly adopt an approved technology with the same insecticide and specifications.
• What are the LLIN Technologies? NetMark’s textile engineer described each of the three LLIN technologies (polyethylene yarn with embedded insecticide, treated netting, and treatment of finished nets), the pros and cons of each, and their general cost.
• Where can you get financing support? Presentations were made by IFC and NIXM
• What is best for your company? August 23 was set aside for private meetings between the companies and NetMark on technologies and IFC/NIXM on financing options

Rationale for LLINs: LLINs are perhaps the best method available for individual and family protection from malaria. As 97% of infective mosquito bites occur between 10 p.m. and 6 a.m., protection during sleeping hours is critical. Any good mosquito net provides a barrier to bites, but an insecticide treated net (ITN) using a WHO-approved insecticide can kill and repel anopheles, making it twice as effective as an untreated net. ITNs, however, need to be re-treated after three washes as the insecticide is washed out; and re-treatment behaviors have been difficult to promote in Africa. LLINs retain their killing power for at least 20 washes and are the net of choice for many malaria control programs. Nigeria does not currently produce any LLINs.

LLIN Production Technologies: To date, the LLIN market has been dominated by products from Vestergaard Frandsen (Permanet®) and Sumitomo (Olyset®). NetMark had strongly encouraged VF to manufacture in Nigeria, but VF ultimately decided to keep all production in Asia. Sumitomo has just opened a factory in Tanzania with A-Z Textiles, but has been reluctant to form joint ventures in other African countries. Given this vacuum and its concerns over the future of African net manufacturers, NetMark formed a joint initiative with Bayer Environmental Science and Siamdutch Netting Company to develop a public-domain process for converting untreated nets into LLINs. While Bayer spent millions developing the LLIN formulation and Siamdutch built the new $5 million Tana LLIN factory, NetMark focused its investment on developing the mechanized treatment process based on criteria such as environmentally friendliness, worker safety, and scalability with different size machines to meet varying production needs. Meanwhile other companies have developed their own LLIN technologies. WHOPES will likely issue recommendations for three other LLINs in January 2008: DawaPlus®, NetProtect®, and Duranet®. Companies that replicate the production specifications of a WHOPES-recommended LLIN can get a WHOPES recommendation in six months rather than 24 months by filing for an “extension of recommendation.” NetMark promotes no single technology and is willing to help companies adopt the technology that they think is appropriate for their business and the market place.

Barriers to LLIN Investment:

• All companies cited the need for a stable, enabling environment by the government that has verbally promoted local production while making major purchases of imports—and asked that some of the 17 million ITNs be set aside for local procurement.
• Most companies noted the cost of financing for equipment as a burden and would appreciate soft financing help
• All noted that the cost of installing a Quality Control lab ($80,000 plus staff) was an unforeseen expense that would be hard for them to cover and expressed a desire for donor support for that investment.
• Tax and tariff policy was a concern in two conflicting ways: some wanted an immediate increase in the tariff on nets and LLINs to cut out competition; while others argued for a decrease in the 20% tariff on imported nets that they might require if local production was not sufficient to meet their needs. There will indeed be a shortage of untreated nets once the major net manufacturers switch to LLIN production.
• All would need some level of technical assistance when installing an LLIN technology to ensure it was being done correctly and meeting the international specifications
• Some expressed a desire for NetMark support to develop a partnership with one of the international technology holders.

Follow-Up: Six companies signed up for private meetings while two others said they would contact NetMark later about their plans. NetMark anticipates that at least two companies will install LLIN capacity in 2008 with total production capacity to start at one million LLINs a year.

• One company will move quickly to establish LLIN capacity by the first quarter of 2008 with its own financing, although it would like financial and technical help in setting up a Quality Control lab
• Two companies are trying to establish joint ventures with LLIN technology holders (polyester and polyethylene) to help them produce an LLIN under the international brand name or a local brand
• One company may import a polyethylene LLIN that it will market under its own brand.
• Two companies are finalizing the financing needed to start LLIN production. One noted that they had made plans to invest early this year in the NetMark process, but were dissuaded from doing so by the IFC who erroneously reported that the machines and treatment process were not working well at the Tana factory in Thailand. (Tana has sold one million DawaPlus LLINs while WHOPES is pending).
• Net stitcher associations are ready to consider the bundling of their nets with an LLIN treatment kit and/or the use of treated netting for their sewing operations.
• Most of the companies expressed a preference for the NetMark technology as it was designed as an easy way for polyester manufacturers to add an LLIN capacity. The other technologies require changes in the front part of the factory with the result that the treated netting runs through the rest of the factory and worker safety measures have to be taken—particularly with the people sewing many nets each day. Polyethylene manufacturing requires the installation of new equipment and a stable electrical power source as the yarn extrusion machine should be run 24 hours a day. One company intends to partner with a polyethylene manufacturer.

Follow-Up: NetMark will provide technical advice to those companies that are moving forward to develop an LLIN capacity and will explore other sources of funding to help with LLIN technology transfer, particularly for the establishment of first class quality control systems. It is anticipated that at least two Nigerian companies will be producing LLINs in 2008.

USAID NetMark LLIN Production Process (446 KB, pdf)

Additional Activities: Africa Net Manufacturers' Association Launched