Cipla Uganda, the biggest manufacturer of drugs in that country, has suspended exports to Zambia, over unpaid invoices on products worth almost $12m, over two years.
Cipla’s Uganda may be warning investors of problems in Zambia, but yesterday it also gave them good news about a winning a contract with South Africa and the World Health Organisation, to supply Antiretroviral and anti-malarial drugs.
The company’s problems in Zambia threaten to get worse, but they may be offset by business developments elsewhere.
Talks are advanced with 16 countries, which would expand Cipla’s exports to 22 markets.
Uganda’s pharmaceutical industry is at risk from the growing debt crisis in Zambia.
According to officials, CiplaQCIL continues to engage extensively and constructively with the Government of Zambia regarding payment of the over dues this financial year and has already received $1.2 million in the first quarter. This engagement involves forfeiting the over dues through an international bank to secure guaranteed payment.
“The company is relentlessly focussed on driving shareholder value through increased revenues and profitability. Even though it was business unusual during the COVID-19 pandemic, CiplaQCIL was fortunate to operate without interruption and even managed to improve attendance and productivity levels during this period. The new financial year 2020/2021 has presented opportunities in increasing the customer base with orders from Botswana for 2.3 million doses of ARVs for adults living with HIV,” CEO of CiplaQCIL, Nevin Bradford, said.
“The 2019/2020 financial year was a challenging year especially given the Zambia issues and most recently the COVID-19 pandemic. We can be proud though despite numerous challenges, CiplaQCIL continues to deliver on its ethos of “Caring for Life” by producing quality, affordable medicines to ensure that people have access to life-saving medication,” he said.
This was at the at second annual general meeting (AGM) held last Thursday 20 August 2020.
The company said in a statement on Monday that the losses were due to the fact that it has failed to collect debts from the Government of Zambia, increased competition from other companies that produce similar products and reduction in drug prices.
To calm the fears, the company said in a statement that “Management endeavoured to minimize the impact on the reduction in revenue from Zambia through increased funder related sales.” It said sales to Global Fund business has rebounded significantly in the first half of this reporting year.
Cipla, which was established in 2005, manufactures Anti-retroviral (ARV), artemisinin-based combination therapies (ACTs) and Hepatitis medicines to treat HIV/AIDS, Malaria and Hepatitis.