May & Baker Nigeria Plc on Friday says the pharmaceutical sector needs a bail out of N500 billion to play actively in African Continental Free Trade Area (AfCFTA) agreement.
Mr Nnamdi Okafor, Managing Director, made the remark at end of the company’s yearly media parley in Lagos.
He suggested that the Federal Government should set aside a N500 billion bailout fund to strengthen the industry in anticipation of AfCFTA agreement soon to commence.
According to him, the bail out fund will help reposition the industry, especially in the areas of capacity building and make it more competitive under AfCFTA.
“We have a challenge of whether we are ready to compete under the AfCFA, but I will say that we may compete favorably under the current situation because many companies around us do not manufacture, but the dynamics may change.
“The industry needs bail out, the government should provide a N500 billion bail out fund for the industry to build capacity to compete favorably with these companies coming from other countries in Africa,” Okafor said.
Speaking on the operating environment in 2019, he said ban placed by the federal government on production and distribution of codeine-based cough syrups due to its misuse affected the industry.
“Manufacturers like us had to contend not only with the loss of revenue from these products but also tied down funds already invested in finished goods and raw materials for the same product.
“This is particularly a challenging year for our company as we are undertaking a major restructuring of our product portfolio.
“We were compelled in the last two years to discontinue the production of some of our top cash cow brands as a result of age and change in national treatment protocols and policies,” Okafor said.
He explained that the company, in spite of the challenging environment, invested in key strategic initiatives in 2019.
Okafor noted that the company took steps to actualise its new anti-sickle cell medicines and nutraceuticals.
He stated that these products would be launched in 2020 given the stage the company had reached.
Okafor added that the company recently signed a contract manufacturing agreement with Sanofi Nigeria, a subsidiary of a French pharmaceutical company to produce key products from its World Health Organisation standard production facility.
He said the project would not only increase its capacity utilisation but also signal to the world that Nigeria had arrived in pharmaceutical manufacturing.
On the rights issue floated by the in 2018, Okafor said the offer was subscribed by over 76 per cent.
According to him, the fund from the offer has been fully applied to the various purposes as stated in the rights circular.
He said the proceeds were invested in facility expansion, debt repayment, investment in vaccine production and marketing and promotions.