South Africa on Friday unveiled plans for a 1.6 billion rand ($208 million, 157 million euro) pharmaceutical plant, in a joint venture with Swiss biochemicals group Lonza to produce anti-AIDS drugs.

Lonza, headquartered in Basel, confirmed talks with the South African government but said no deal had yet been inked.

"This joint venture, named Ketlaphela, will establish the first pharmaceutical plant to manufacture active pharmaceutical ingredients for anti-retroviral medicines in South Africa," Science Minister Naledi Pandor told journalists.

The plant would produce the key ingredients needed to make the anti-retroviral drugs that have turned AIDS into a chronic condition, rather than a death sentence, in a nation where 5.6 million people have HIV.

South Africa will invest 1.1 billion rand, while Lonza will put 500 million rand into the plant, whose name means "I will survive" in Sotho, said Pandor.

"Lonza's high Swiss standards plus their superb track record of establishing and maintaining successful commercial operations in developing countries, make them a valuable and desirable partner," she said.

A statement from Lonza on its website Friday said a deal had not yet been finalised.

"The discussions are still at an early stage and nothing has been signed," it said.

However, a Lonza vice president Simon Edwards told media in Cape Town that the company was "looking forward to a long term involvement in this project...and to long term success".

"From Lonza, we are incredibly proud and honoured to be part of this project," he said.

"This is the start of it today," he added.

The new plant will help stabilise the price of drugs used to fight AIDS, as South Africa currently imports the main ingredients needed.

The plant will create about 2,600 jobs once it's running in 2016, he added. About 3,800 people will be employed for its construction.

South Africa has the world's largest AIDS treatment programme, serving 1.3 million people.

The treatment programme has already made gains in combating the epidemic, but the numbers of people needing drugs will keep growing as more and more people begin a lifetime on the medicines.