Lula, who hands over the reins to protege Dilma Rousseff on January 1, called the new anti-retroviral (ARV) drug factory in Mozambique a "revolution" for Africa's efforts to control the disease.

"The fact that we are building the African continent's first factory to produce anti-AIDS drugs can be seen as a revolution," Lula said at the plant on the outskirts of the Mozambican capital Maputo, a stop en route to this week's G20 summit in Seoul.

The 25-million-dollar (18.1-million-euro) factory is being built with the help of 21 million dollars in aid from Brazil and is expected to begin packaging Brazilian-made pills by the end of 2011, producing its own pills by the end of 2012.

Lula, who proposed the idea on a state visit to Mozambique during his first year in office in 2003, toured the site of the new facility and inspected its first piece of equipment, a packaging machine donated by Brazil.

He said he hopes to return to inaugurate the factory when it is complete.

"We have a new president who's going to take over in Brazil on January 1, so I want to be here as a guest together with (Mozambican) President (Armando) Guebuza when Mozambique's anti-retroviral factory produces its first pill."

Mozambique has more than 2.5 million people living with HIV -- nearly 12 percent of the population -- but just 210,000 take ARVs, according to the Mozambican health ministry.

The country depends on foreign aid to finance 80 percent of its HIV medication.

The factory aims to help Mozambique increase the availability and affordability of ARVs, following in Brazil's footsteps in the fight against AIDS.

Brazil famously offers free ARV treatment to every HIV-positive citizen, a programme that sparked controversy when it was announced in 1996 because of concerns about drug resistance and violation of pharmaceutical copyrights.

But it has since been praised as a model for the developing world. The World Bank estimates the free medicine saved more than half a million lives.

While several private laboratories in Africa have ventured into small-scale ARV production, the Mozambican factory will be the first public facility on the continent to produce the drugs.

"We have been confronting one of the worst public health problems using only preventive methods," Health Minister Alexandre Manguele told AFP.

Manguele said he estimates that only half the Mozambicans who need ARV treatment are receiving it.

"With the launch of the factory, we'll produce the medicine we need here. We'll be able to extend people's lives and turn this deadly disease into a chronic illness that we're able to treat," he said.

The factory aims to produce five different types of ARVs for a total output of 226 million pills a year. Officials said it will also produce 145 million pills of other types, including antibiotics.

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