Ghana’s plan to meet the demand for pharmaceutical products through local production could face a major challenge as local firms encounter low production due to lack of capital injection.
The challenge has resulted in most companies producing below 45 percent, leading to an increase in the importation of pharmaceutical products to supplement local supply.
Speaking to the Business Day after listing on the Ghana Alternative Market (GAX) of the Ghana Stock Exchange, the Managing Director of Intravenous Infusions Limited (IIL), Mr. Richard Okrah, stated that the industry requires long term capital to meet the growing demand of pharmaceutical products in the country.
“In economics we don’t use short term funds for long term projects, it will collapse the company”, he warned pointing out that “funding strategic initiatives with short term capital from the banks does not auger well for businesses”.
According to him, the industry will reach 1.6 billion Ghana cedis by 2018, where it would have grown more than 17.9 percent from a 2013 figure of 708 million Ghana cedis.
Now the leader in the supply of Intravenous ( IV) fluids in Ghana and other West African countries, Mr. Okrah maintained that Ghana could double the income if capital injection is made available to the local industry.
He disclosed that pending orders for IV fluids from Burkina Faso and Cote d’Ivoire alone amount to US$650,000 per annum.
“There is an unexplored market to capture in Ghana and the sub region, and we expect our revenue to triple to about 22.7 million Ghana cedis in 2019 from current base of 5.3 million with the required capital injection”, he said.
Though the company currently supplies only 10 percent of its products to the West Africa market, Mr. Okrah was optimistic the figure will rise to 55 percent by 2018.
He was of the view that the company’s position in Ghana and the sub-region has insulated it against macroeconomic hardship that adversely impact consumer spending, hence a bright future.
“We supply between 50 and 60 percent of the IV fluids going to hospitals and pharmacies nationwide and export approximately 10 percent”, he said.
The company is seeking to raise a gross amount of GHS12, 264,600 at an initial public offer price of GHS0.08.
Databank Brokerage Limited and CAL Brokers Limited are acting as Transaction Advisors and Sponsoring Brokers to the Transaction, while Bentsi-Enchil, Letsa and Ankomah is acting as legal advisors.
The offer commenced on October 14 2015 and expected to end on November 25, 2015.
