Fidson’s WHO compliant new facility will grow FX, create jobs

Fidson Healthcare Plc, a major pharmaceutical company, listed on the Nigerian Stock Exchange has commenced operations in its recently completed World Health Organisation (WHO) compliant, ultra-modern brand new manufacturing plant, which is arguably the largest pharmaceutical manufacturing facility in Africa.

According to a statement released by the company, the facility provides an opportunity to export some of its products to other countries (Africa and beyond) and grow its FOREX income while also extending affordable quality medicines to some of the poorer nations within the continent.

The statement noted that “an overarching benefit in job creation as additional 300 jobs are being created while, profitability is expected to improve as a result of increased efficiency”

Adding that asides from increasing production capacity, the new factory would enhance Fidson’s business prospects by enhancing the ability to tender for WHO sponsored programmes, which Nigerian pharmaceutical manufacturers are unable to access, losing out to foreign companies in these tenders.

The new facility is equipped to produce 6 distinct product lines (intravenous infusions and other sterile preparations, tablets, capsules, oral liquids, creams & ointments and dry powder) to contribute immensely to the nation’s medicine needs and proffer opportunities for future exports.

The project is part of the strategic expansion and diversification programme the company started following the successful Private Placement in 2008.

The company’s statement explained that the supply gap existing in the infusion products’ sub-market persists as demand keeps growing linearly with population, informed Fidson’s foray into the IV fluids market.

According to Fidson’s research, it is estimated that 2% of the population (160m) get admitted to hospitals in Nigeria monthly; About 70% of medical patients get infusions at an average rate of 4 bottles per admission while for surgical patients, over 90% of them will be given infusions.

This translates to 3.2 million admission cases monthly; 10.2 million bottles per month; 123 million bottles per year, and is expected to increase with the growing population which is currently put at 2.8% per annum, putting market size in revenue terms at N25bn in 2013 (PMAG).

“With this new facility, we aim to significantly meet orders of the major consumers – the Teaching & General Hospitals, Federal Medical Centres, Big Private Hospitals, Corporate Clinics, etc as far as infusion products are concerned using the existing marketing and distribution platforms. There is an unmet gap of 2,364,000 bottles per month which the new facility is positioned to bridge while growing volumes in the existing production lines including while adding Water for Injection, Ear/Eye Drops lines.

The expected financial contribution from this project is such that shall grow the Company’s turnover by additional N1.9 billion at 75% Activity Level by the 3 rd year of production, N2.9 billion at 90% Activity Level by 6th year and N3.6 billion by the 10th year at same 90% Activity Level. Overall, this project shall contribute handsomely to the Overhead Recovery of the Company thereby growing shareholder value significantly. This will be in addition to increased capacities (almost two-fold) for the existing 5 product lines that will open up opportunities for contract manufacturing.”