Adcock Ingram plots Zim exit

SOUTH African pharmaceutical group Adcock Ingram says it is assessing the viability of its continued presence in Zimbabwe, given the country’s deteriorating economic environment.

BY MTHANDAZO NYONI

The Johannesburg Stock Exchange (JSE)-listed company has interests in flagging Bulawayo-based pharmaceutical manufacturer and distributor, Datlabs through a wholly owned subsidiary, Pharmalabs (Jersey).

“Operations in Zimbabwe remain unpredictable and investment may be required in the short to medium-term to recapitalise its facilities,” part of the statement accompanying the group’s results read.

“Consequently, the board is assessing the viability of the group’s continued presence in that country.”

Zimbabwe had begun to see renewed interest from foreign investors since long-time President Robert Mugabe was removed from power by a military coup in November 2017, but the tide seems to have turned, as the new administration under Emmerson Mnangagwa has failed to break from the past.

Mnangagwa’s government has come under fire for failing to address the country’s economy, which has taken a turn for the worst since he came to power.

Adcock Ingram revealed that turnover in its enterprises in Zimbabwe and Kenya collectively increased by 7,5% to R222,6 million ($16,28 million) compared to R207,1 million ($15,14 million) achieved in 2017, to register a trading profit of R18,3 million ($1,34 million).

“The positive performance is attributable in Zimbabwe to a significant improvement in demand for the top brands following improved stock availability, while the improvement in the Kenyan operation is due to strict management focus by the OTC Division from South Africa,” the company said.

Datlabs produces brands such as Cafemol, Panado, Solphyllex and Lanolene Milk under licence, but has been facing serious competition from imports, mainly from the Asian bloc.

Recently, Datlabs chief executive Todd Moyo told State media that the company required at least $4,5 million to upgrade plant and equipment.

The company also has plans to upgrade its Large Volume Parenterals plant, which would cut the firm’s import requirements.

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