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Cipla projects good growth, eyes new lucrative markets

Nevin Bradford has been the Chief Executive Officer for Cipla Quality Chemical Ltd since November 2013. The Independent’s Julius Businge interviewed him about their COVID-19 experience and general company operations. 

What has been your general business experience since March 2020 when the government of Uganda joined the rest of the world to put in place lockdown measures targeting the spread of COVID-19?

We have noticed an increase in import costs of some of our logistics or raw materials. (However), overall, we are operating at normal capacity and attendance is more than 95% a day. We have continued to export to Zambia, Zimbabwe, South Africa and Tanzania in the last quarter. In the last quarter exports were over $10million and accounted for more 90% of sales.

What explains the Shs36bn loss you recorded for the FY2019/2020?

The results are not a true reflection of the health of the company. The loss is an accounting issue. We have delayed payments from the government of Zambia which we recorded as an expected credit loss. But we anticipate, andare confident that this matter will be resolvedin the first half of this financial year.

What is the future of your business in key markets like Zambia that aren’t paying on time?

We continue to engage the Government of Zambia and are confident the overdue issue will be resolved during this financial year. Zambia remains a valued partner but moving forward we can only supply with payment guaranteed through such means as letters of credit

How prepared are you when it comes to fulfilling the demand for ARVs from the new market of South Africa that you recently penetrated?

We are very ready. The products that we are exporting to South Africa are anti-retroviral….for the treatment of HIV/AIDS. To date over 750,000 packs have been exported to South Africa.

How significant has the Rwanda market been to growth of your business since November 2019 when you sent the first consignment of malaria medicine?

We supplied anti-malarials into Rwanda in 2019. This is the only order we have supplied to date.

Could you share growth projections that you’re envisaging from your recently reported growth in sales to international donor organizations?

We anticipate significant sales growth in our financial year 2020/2021. This will come from increased sales to donor organisations such as the Presidents Malaria Initiative, exports to South Africa, exports to new markets such as Botswana and of course National Medical Stores.

What is the company’s strategy on cost control, a factor that has recently compromised growth in profits? 

The Company rigorously controls costs and seeks to reduce them wherever possible without compromising efficiency, safety and quality.

You have a variety of products on the market. What makes them competitive/unique in Africa and beyond?

We have a WHO approved facility and our products are also prequalified by the WHO. We are manufacturing for Africa in Africa.

How has the market received your new products/drugs?

We now manufacture the new first line therapy for HIV-AIDSTenofovir-Lamivudine-Dolutegravir and will shortly introduce a new version of an established product Tenofir-Lamivudine- Efavirenz with a 400mg not 600mg dose of efavirenz. These two products are the standard HIV therapies currently.

What company policy have you put in place in line with government’s COVID-19 pronouncements ondiscouragingbig gatherings?

We avoid gatherings. We are conducting online or virtual meetings even at board level. Not more than seven people are allowed to gather for departmental meetings. The AGM, which will be in August this year, will be a virtual meetingwith all shareholders invited to attend through a virtual conferencing facility such as Zoom or Microsoft Teams. Factory visits are postponed until the Covid-19 cirsis is gone.

What is your experience with the government’s BUBU policy?

We try to source raw materials in Uganda whenever they are available. However, most pharmaceutical ingredients are not locally available in Uganda. We import them from India, China and Europe. But there are readily available materials like ones for construction, furniture and related materials that we source locally.

How does Cipla benefit Uganda’s economy?

When we export, we indirectly boost stability of the Uganda shilling. In the last quarter we exported over 410 million of medicines. We also estimate that over 10, 000 people derive their livelihood from our factory operations. We make a significant contribution of tax in form of PAYE, VAT and other utilities like electricity. Around 40% of our turnover is returned to the treasury either directly or indirectly.

What picture do you have for Cipla in the next three years?

This year we will return to profitability. We want to grow the business by entering new areas of manufacturing – medicines for the treatment of cancer and diabetes.  We will also expand to export to Nigeria, Madagascar, Senegal and Côte d’Ivoire.

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