Pharmaceutical manufacturers are calling on government and other stakeholders to make finance more affordable in order to expand their operations, produce more products locally and expand into other West African countries.
Daniel Kissi, the CEO of DAS Pharma – the new entity from the merger of Dannex, Aryton and Starwin pharmaceutical companies which yesterday was listed on the stock exchange – told the B&FT that the industry would be better placed if government provided cheaper capital and offered them preferential treatment when it comes to procurement of products.
“What the industry is looking for is support when it comes to preferential procurement, clearing outstanding receivables and government providing access to affordable capital, so we can grow the business from a capex point of view. This is what we are looking for as an industry.
“What preferential procurement means is that if a particular product can be made locally, then we would prefer a situation where it is bought from us. What we would like is a structure that allows us to have preference when it is proven we have the capability,” he said.
Currently, 70 percent of medication in Ghana is imported while 30 percent is made locally. Within the context of that 30 percent, Mr. Kissi believes local manufacturers have the capabilities to expand – but there is the need to have affordable capital, and once that is achieved the 30 percent will grow to 50 percent.
Cost of finance, according to several trade bodies and industry leaders, is a major barrier to growth in the country. Several Bank of Ghana reports point to the fact that the average cost of lending to businesses still stands above 20 percent.
DAS Pharma merger and listing on stock exchange
Mr. Kissi, DAS Pharma’s boss, has pledged to embark on a growth agenda that will see the company become one of the leading pharmaceutical manufacturers in West Africa in two years. He noted that the coming together of the three companies will enable the new entity to draw on the capabilities of each of the individual companies merged, to create a strong company that can grow and achieve its objectives.
“Synergies derived from the merger will enable Dannex Ayrton Starwin Plc to improve operating efficiency, optimise costs, greatly improve its offering to customers and consumers, grow volumes and profitablitiy, and thus achieve its growth ambitions and maximise shareholder value.
“We will invest in the business to strengthen our footing in Ghana and expand into the rest of West Africa and beyond. Within the next two years we should be present in the major markets of West Africa; that is the plan we have,” he said.
Mr. Kissi, speaking on the stock exchange floor during the official listing of DAS Pharma, added that the merged entity will become the largest local pharmaceutical manufacturing company in Ghana with a portfolio of 80 plus products – all manufactured here in Ghana.
He added that the entity will now have a wide distribution network cutting across the whole of Ghana with over 2,000 active wholesale and retail customers in its network, and a staff strength of over 600.
He noted that the company is coming into the market at an opportune time, when the industry as it is known is changing as a result of consumer and customer needs changing; industry players integrating vertically; dealer own-brands appearing on the market and technology manifesting in online pharmacies, electronic payment systems, online healthcare systems, and online doctors.
Priced at 40 pesewas per share, the current market capitalisation of the new company stands at GH¢33million and with a workforce that is just south of 600; and as a merged entity, DAS is now the industry leader with 40 percent market share.