Shareholders bemoan effects of policies, others on pharmaceutical sector
Seek conducive business environment, improved public services
Shareholders have bemoaned the myriads of problems inhibiting the growth of the pharmaceutical industry, with multiplier effect on the sector’s stocks on the Nigerian Stock Exchange (NSE).The problems, ranging from stifling effect of unfavorable fiscal and monetary policies, porous boarder, leading to influx of unregistered products, as well as fake and adulterated products, have held the sector down.
Others include high cost of sales, occasioned by cost of raw materials both local and international and high interest rate on loans from bank.The shareholders who spoke at the yearly general meeting of Fidson Healthcare Plc urged government to create a conducive environment by improving public utilities, and make available adequate funds to the relevant research institutes in Nigeria.
They noted that local production has not recorded much progress due to these number of constraints facing the local drug industry, saying there is the need for government to come up with palliative measures to adequately protect the operators.The President of New Dimension Shareholders Association, Patrick Ajudua, said: “Their challenges are numerous from issues of porous boarder leading to influx of unregistered products, to fake and adulterated product. High cost of sales occasioned by cost of raw materials both local or international.
“Also issues of high interest rate on loans from banks, high port charges for imported materials from the port and delay in clearance of goods. There is no subvention from government in terms of accessibility and affordability of foreign exchange.”Therefore, if Fidson must survive, it needs holistic solutions to the problem enumerated above. The economy is not favourable to the manufacturing/productive sector, hence government needs to intervene urgently as they are greater employer of labour after the agric sector.”
The President of Constance Shareholders Association, Mallam Shehu Makail, said the total dependence on imported raw materials and machinery, due to under-development of indigenous technological know-how, is a major obstacle to the development of a local pharmaceutical industry.However, he noted that the local drug industry has continued to grow, but added that it needs more “encouragement”.
“There should be soft long-term loans at special interest rates, direct allocation of foreign exchange at a lower rate, and controlled importation of medicinal products such as simple analgesics and antimalarials;”There should be tariff protection on all pharmaceutical raw materials, machinery and spare parts. The local drugmakers should also be assisted through provision of raw materials and other local inputs,” he said.
The Chairman of the company, Segun Adebanji, said the need to attend to the funding issues in the industry cannot be overemphasised, given the teeming population of the country.”Urgent government intervention is needed in the industry to engender a competitive pharmaceutical industry and access to healthcare by the masses. The yearning of the key players in the industry in the years past has started to yield the desired outcome.
“In 2018, there was allocation of funds for the Basic Healthcare Provision Fund (BHCPF); the National Primary Health Care Development Agency (NPHCDA),” he said.For the 2018 financial year, the company declared a dividend of 15 kobo per share due to every shareholder of the firm.The company recorded an increased turnover of 15 per cent from N14.06billion in FY 2017 to N16.23 billion in FY 2018.However, because of the increased cost of sales from 49 per cent margin in 2017 to 61 per cent and increased Finance cost (up by 92 per cent), Fidsons’ Profit Before Tax for the period was down to N160.9 million from N1.6 bilion in FY 2017.