In this interview with Udeme Ekwere, the Managing Director, May & Baker Plc, Mr. Nnamdi Okafor, says that funding is vital to the survival of the pharmaceutical industry in Nigeria.
We are aware that May & Baker invested N4bn in the plant that was recently inaugurated by President Goodluck Jonathan, what exactly would be the importance of this plant to the Nigerian economy and the pharmaceutical marketing sector?
Well, I think that the plant is one of the best things to happen in this country. Before now, pharmaceutical industries had always operated at a level below global standards, and this negatively affected growth in the industry, and so I think it will go a long way to revolutionise the industry in Nigeria. That means we will now have the opportunity to step up and we will also be in a position to provide products that can match other countries of the world. So, we see it as something of pride that will benefit the nation and the continent as a whole. Remember that the factory, whose construction started in 2008, is an ultra-modern plant, built with facilities to meet the standards set by the World Health Organisation, United States Food and Drug Administration and other globally recognised regulatory bodies. The N4bn plant has the capacity to produce over 4.5 billion tablets and 37.5 million bottles of liquid preparation annually. So this has come as a relief to the country. Also, do not forget that it is a project that will ensure more jobs, which will, in the near future, go a long way to reducing the current unemployment figures. It will also enable the country to get the much needed foreign Exchange, through the creation of globally acceptable products.
To the citizenry, we need this kind of plant to help develop products of international standards, and this kind of project will also ensure that they have access to more syndicated products that they hitherto did not have. So, I believe it is a win-win situation for everybody.
Would you say government has been supportive of the pharmaceutical sector in the country?
Yes, I would say so. Government has actually done a lot to support the industry right now. We had requested in the past for some waivers on some raw materials used in our business and for some certain products and government granted the requests. As an industry, we also asked for the ban of the importation of certain products that we believed we in Nigeria had the industrial capacity to meet total demand of and government also did that for us. In fact, they are in the process of adding some more products to that list, about seven products, so it shows that they believe in us, and it is quite commendable. It is also worthy of note that we also requested for what we call domestic preference when we bid for tenders from foreign companies. We were saying that Nigerian companies should have a measure of such tenders and government has approved that, and it is expected that it should be fully implemented soon. In fact, I can confirm to you that some of us met with the Permanent Secretary of the Federal Ministry of Health and he reassured the industry that domestic preference must be implemented in all subsequent procurements by the ministry and I think that it is quite positive and commendable.
So, apart from this, what else do you think government can do to support the industry?
Well, I think we need more support in the area of funding. The industry on a whole needs long-term funding to be able to boost businesses and upgrade facilities to ensure that the Nigerian pharmaceutical sector is practicing at the level that could match global standards. For instance, many companies have tried to upgrade in line with what we have done with the Pharmacentre, but they need good funding to achieve that. For us, we have invested heavily in building that factory and most of the funds, I will say, are short-term funds. So, we want to be able to get some funding that will give us a kind of breather so that we can pay off the banks we owe. This is where long-term funding comes in. I think that government is also doing something in that direction, through the recent N200bn grant. Although we have not seen the money yet, we are very hopeful that very soon, that amount will become available for the industry, and it would help us to be able to produce and meet the demand of the consumers.
So what is the update on the WHO status that your company and a few other manufacturing firms tried to apply for recently?
As I am talking to you now, we have experts from the WHO in Nigeria, and they are here to audit or inspect the facilities of the Pharmacenter, our new plant and some other factories in the country. And so, what they will be doing is to look at what these factories have, as well as identify the gaps (if any) and make recommendations to WHO in Geneva when they return. That would be preparatory to the pre-qualification exercise. The purpose of this exercise is to shortlist three companies in Nigeria, that WHO would provide technical assistance to and to ensure that they achieve pre-qualification in the shortest possible time. And so, that process has already started.
So, if you succeed as one of the companies to achieve this status, what would it do for the business?
Well, the biggest thing it would do for us is that it would give us the opportunity to bid for tenders from some foreign procurement agencies that require WHO pre-qualification and it will afford us the opportunity to have access to some funds from some procurement agencies with global consent. So, we believe that once a company is pre-qualified, we will be in a position to compete favourably and get some share of the funding. Nigeria gives some counterpart funding to boost that fund, but no country in Nigeria is benefitting from it currently.
Your company has not paid dividends for some years now, what should your shareholders be looking forward to in the next financial year?
Well, let me first use this opportunity to commend our shareholders, because they have been a wonderful group of people, very understanding, because we have not given them dividends for a number of years now, and they haven’t sacked us yet, the company is indeed very grateful for that. However, now, that we have completed the Pharmacentre, we expect that from next year, we will begin to enjoy the full effect of this. It may even happen this year, or maybe not, but we are certain of next year, and I say that because, we probably have to task ourselves for the next four to five months. However, we believe that the business should be able to pay dividends to shareholders.
What I will say is that we have promised, like I did at the annual general meeting, that we are going to pay dividends to them next year, and we will do it.
You mentioned something about your concentrating more on your food business, what plans are you making in this regard?
We are making progress, this is not a very good time to talk about our strategies and what we plan to do and when it will take effect, but I can assure consumers and shareholders that before the end of this year, the first of those products will hit the market and there will be a lot more next year. We believe that this will help to reduce our dependence on just one product for that business and it is something we are working on.
Apart from this, what else are you doing to ensure profitability in the business?
The first thing we are doing is that we are looking at our strategy that is the long-term strategy of the business. We are looking at all the different markets, trying to see where there are gaps and determine markets that are profitable. We expect that before the end of the year, we would have concluded on that. So, we will only be making investments in those markets where the returns on investments will be good, that is in the long-term. In the immediate term, we are looking at improving efficiency of their operations, cutting costs and emphasising those products that would give better margins, and pruning those whose margins have thinned out over the years. Basically, it is a combination of cutting costs and emphasising products that bring profits.
Source: Punch
