Zim forex crisis hits drugmaker

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PHARMACEUTICALS maker MedTech Holdings (MedTech) has warned of a looming drugs shortage due to the escalating foreign currency challenges.
Projecting the company’s outlook after announcing its financials for the half year to June 30 2018, MedTech chair Rose Mazula said “in the short term, we do foresee continued delays in remitting foreign payments and this will negatively affect our ability to service existing foreign creditors amounting to 37,3 million rand. This may lead to cuts in supply and resultant stock outs”.
She said it’s market share in the medical segment has declined by 37 percent due to low stock levels, as foreign suppliers cut credit lines over non-payment.
The country’s pharmaceuticals sector relies heavily on imports to meet local demand.
According to Pharmaceutical Society of Zimbabwe president Portifa Mwendera, local drug manufacturers are currently operating way below capacity, and they need approximately $45 million to retool.
As a result, more than 90 percent of drugs in public hospitals are supplied by donors.
Meanwhile, MedTech recorded a profit after tax of $689 482, from a $577 016 loss incurred from prior comparable period.
Mazula said the sharp rise in general price levels is expected to persist resulting in erosion of consumer spending, leading to higher demand for “smaller pack sizes and possibly a decrease in revenue in the second half of 2018”.
“Nevertheless, we will continue to do our best to maintain market share and sales and keep up the stick cost control,” she said.