French generic medicine manufacturer, Biogaran has announced the acquisition of Nigeria’s Swiss Pharmaceutical company (Swipha) under a deal that would see the new owners intensifying local production of drugs in the country.
The capacity utilisation in the nation’s drug manufacturing sector had dropped to an all-time low of 20% due to inadequate access to foreign exchange for importation of critical raw material, mainly active pharmaceutical ingredients (APIs) and machinery inputs, as well as competition from poorly regulated markets.
Indications also emerged that the acquisition may have been made possible due to inability of the Nigerian firm to sustain its operations arising from high cost of operations and huge debt.
By finalising its acquisition of Swipha at the weekend, Biogaran, realises its first investment in Africa and drive for international expansion while confirming its confidence in the Nigerian economy.
In a chat with The Guardian, the President of Biogaran, Pascal Brière, explained that the African pharmaceutical sector offers important growth opportunities across the continent fuelled by Africa’s rapidly emerging middle-class.
“Nigeria quickly became a common-sense choice for us. The country offers strong assets despite economic challenges that are linked to the oil sector. Nigeria is a market of 184 million people with a dynamic free trade economy.
“We made a survey of many countries to check whether there was room for strong development of our BIOGARAN concept abroad but many of such countries were eliminated because they were very mature markets and there was no room for new development to succeed. Nigeria was a different market and had room for development.
“Other determining factors are Swipha’s great experience, its impressive network and know-how which will make collaboration with a group like Biogaran even more natural”, he said.
On plans for the acquired entity, Brière noted that the new management’s first priority is to revitalize the company and give confidence to employees on its commitment to a prosperous future.
“The last few years have been rather difficult for Swipha but the company has exceptional assets, a unique know-how, good materials and a strong reputation. I am convinced that Biogaran’s support will be pivotal in repositioning the company as a major player in the sector and help win new markets and launch new products,” he added.
PMG-MAN Chairman, Okey Akpa, had called on the Government to urgently address the anomaly created by ECOWAS Common External Tariff (CET), whereby imported medicines attract zero duty while raw and packaging materials for local manufacturing attract up to 20% duty, arguing that it was inimical to national interest.
He appreciated efforts made so far in addressing the CET imbalance, but warned that the high attrition rate in the sector, and the disastrous consequences of further delays, indicated the need for Government’s imminent intervention.