The Nation Newspaper

Tag: May & Baker

  • May & Baker receives WHO cGMP certification

    The World Health Organisation (WHO) has certified May & Baker Nigeria Plc as a pharmaceutical manufacturing company with adequate facilities and processes that meet the global health organisation’s current Good Manufacturing Practice (cGMP).

    The announcement, which was  communicated to May & Baker Nigeria by the world health ruling body, caps a deliberate and sustained effort by the company to seek international accreditation and certification for its production processes and products.

    The certification opens an opportunity for global drug contract manufacturing to May & Baker, whose Ota, Ogun State-based manufacturing complex known as The Pharmacentre was designed and positioned as the most modern pharmaceutical factory in the West African region.

    Nigerian pharmaceutical firms previously were not in a position to participate in international tenders for medicines against the three pandemics that require WHO prequalification. Health experts identified this as a major constraint on the local supply of medicines, especially anti-retroviral (ARVs) drugs, anti-malarial and anti-tuberculosis agents.

    The road to the WHO GMP certification began as far back as 2008 when May & Baker commenced the construction of a world class manufacturing facility at Ota, Ogun State. The facility, which was commissioned in 2011 by President Goodluck Jonathan, was designed to meet all requirements of international pharmaceutical manufacturing best practice, from civil works to equipment installations, quality assurance, input supply and production processes.

    In 2012, the company applied to the WHO for GMP certification. May & Baker Nigeria Plc’s Pharmacentre was inspected by WHO experts four times between 2012 and 2014 in the course of mandatory and advisory inspections. In all inspections, positive reports were made about the Pharmacentre, while improvements to processes, documentation and further training were carried out. In September, 2014, the WHO finally gave a nod to the company as having met the requirements for GMP certification.

    Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, noted that the firm has become synonymous with excellence since it started operations in Nigeria in 1944 as the first pharmaceutical company in the country, pointing out that the WHO certification is not an end in itself but another motivation for further attainments in the quest for excellent healthcare delivery in Nigeria.

    He outlined that May & Baker was the first pharmaceutical company in Nigeria, first to introduce a new dosage Chloroquine regimen, first ISO-certified pharmaceutical company, first to set up ARV plant in Nigeria and first and only pharmaceutical company in Nigeria to delve into local vaccine production.

    According to him, the company has by this certification confirmed that the confidence and funds committed in the Pharmacentre will be used as a spring board to attain greater participation in both the local and international pharmaceutical markets.

    He however pointed out that the journey to WHO’s prequalification of products is not yet over as the company would soon commence the next stage which will involve the presentation of specific products for prequalification by WHO.

     

  • Danjuma assures on May &Baker’s growth

    FOR shareholders of May & Baker Plc, the future can only be brighter and better.

    This was the assurance made by the Chairman of May & Baker Plc, Lt. Gen T.Y Danjuma (rtd), during the company’s 70th anniversary celebration in Lagos.

    Upbeat, Danjuma noted that the company had moved from a distributor of products imported from its principals, to a local manufacturer of quality medicines for the Nigerian market and now to a world-class manufacturer of quality specialised medicines, ready for the global market.

    Taking stock of the company’s record of performance in the preceding year, he said: “we began a policy of future based investments. We saw the need for global best practice and competitiveness. That was why we embarked on the long term project to seek international accreditation for the manufacturing process of the company. The first step was to build a factory that would meet the standards of the world health organisation (WHO) in Good manufacturing practice (GMP) and other ramifications. That factory was completed and inaugurated in 2011. Now, we are on the verge of obtaining WHO GMP certification for this facility and pre-qualification for our products.”

    Echoing similar sentiments, the Managing Director/CEO, Mr. Nnamdi Okafor, observed that the quest for global best practice had opened a floodgate of interests in the Nigerian pharmaceutical manufacturing industry.

    He praised the efforts of the government through the Federal Ministry of Health and the National Agency for Food and Drugs Administration and Control (NAFDAC), in assisting growth in the pharmaceutical industry.

    Also, Minister of Health Prof. Onyebuchi Chukwu, said May & Baker, has made several giant and pioneering strides in the development of the nation’s pharmaceutical sector, since its inception.

    The minister affirmed the disposition of the Federal Government to actualise its joint venture with May & Baker in the production of vaccines in Nigeria, and urged focus on research to finding cures to viral hemorrhagic diseases such as Ebola fever, Lassa fever and Dengue fever, among others.

  • May & Baker plans to raise new equity funds

    May & Baker plans to raise new equity funds

    May & Baker Nigeria Plc is considering all options to raise new equity funds and recapitalize its balance sheet as the healthcare company seeks to optimize the gains of its recent huge investments and defray short-term finances that have been encumbering its bottom-line.

    Management of May & Baker at the weekend outlined plan to enhance the performance of the company to shareholders and financial journalists during a facility tour of the company’s manufacturing complex in Ota, Ogun State.

    Managing director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, said the company needs new equity funds to support the long-term growth of its business and reduce the high cost of fund, which has been constraining its profit in recent years.

    According to him, while the fundamentals of the company have shown appreciable improvements as reflected by rising sales and improving cash flow, the company would need additional equity funds to further strengthen its operations and ensure returns from recent investments get to the shareholders.

    He said the company looks towards raising between N2 billion and N3 billion but the board of the company would decide on the appropriate means to raise the funds and the exact amount to be raised, subject to the approval of relevant regulatory authorities.

    “We believe that this company needs new equity capital because the cost of funding is quite high,” Okafor said.

    He outlined that the company has a bright future as it has been able to build strong institutions and brands that will ensure sustainable growth irrespective of changes in management and operating environment.

    He noted that with the expected certification of the company’s products and processes by the World Health Organization (WHO), the company is set to become the first in Nigeria to be certified by the global health organisation, with immense potential for greater global opportunities and increased earnings.

    He said the company has been receiving several enquiries from prospective clients who want to use its world-class pharmaceutical manufacturing centre for their drug manufacturing adding that the impending certification of the General Manufacturing Practice (GMP) at the centre would encourage more customers.

    He pointed out that the WHO certification would highlight the leading position of May & Baker in the healthcare industry having recorded several milestones including being the first pharmaceutical company in Nigeria, the first anti malaria manufacturing drug company in Nigeria, first company to manufacture anti retroviral drug in Nigeria, first Pharmaceutical company to diversify to other sectors and first to commence distribution of vaccines in Nigeria among others.

    “We want to build a company that is strong, stable and globally relevant by setting up strong institutions and strong brands. We have launched May & Baker on the path of sustainable and profitable diversification,” Okafor said.

    Shareholders commended the company for its foresight at establishing the multi-billion naira Ota manufacturing complex and promised to support the recapitalization of the company.

    National coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said shareholders would do everything possible to support the company.

    According to him, availability of amenable capital is a prerequisite to corporate growth and May & Baker is not an exception.

    “We must do everything possible to ensure the growth of this investment; it belongs to all of us. Without money, investment will not be able to grow. We need to support the management in recapitalizing the company. Shareholders should also be patronizing the products of all quoted companies because in that way, they will be able to grow and deliver better dividends and more jobs,” Nwosu said.

    Vice President, Nigeria Shareholders Solidarity Association (NSSA), Mr. Matthew Akinlade, said the company has intrinsic potential for discerning investors noting that he had increased his shareholdings in the company.

    “When the President commissioned the PharmaCentre, I was here and I discovered the opportunities in the company, this informed my decision to mandate my stockbroker to buy more shares of the company for me. I bought more of the shares because I saw the potentials in this company,” Akinlade said.

    National President, Constance Shareholders Association of Nigeria, Mallam Shehu Mikhail, said May & Baker is well-positioned to be the best in Africa given its huge investments in the PharmaCentre.

    According to him, the company needs to leverage on the opportunities provided by its leading position to increase its market share, visibility of its products as well as establish outlets in nooks and crannies of the country.

  • What prospects for May & Baker?

    Amidst the lull in the stock market, May & Baker Nigeria Plc has shown strong resilience. With a 14-day capital gain of 36.2 per cent, the company has out-performed the average market’s return of -1.4 per cent. Taofik Salako reports on the underlying variables

     

     

    The stock market is witnessing a slowdown this month. With average monthly gain of 12.70 per cent in May and five-month average return of 34.60 per cent by the end of May, substantial capital gains and global variables have orchestrated profit-taking transactions. The All Share Index (ASI), the common value-based index that tracks prices of all listed equities on the Nigerian Stock Exchange (NSE), opens today with a month-to-date return of -1.44 per cent. Besides its primary importance as the general benchmark index for the stock market, the ASI doubles as Nigeria’s country index and as such reflects the mingling variables of the Nigerian market with the global marketplace. In simple value terms, investors have lost about N108 billion so far this month. Aggregate market capitalisation of all equities opens today at N11.967 trillion as against its opening value of N12.075 trillion. Last week was particularly testy with the market losing N888 billion within the last three trading days.

    May & Baker Nigeria has proved to be the contrarian stock amidst the downtrend. With a month-to-date return of 36.2 per cent so far this month, investors in the healthcare company have earned N784 million in capital gain in the past two weeks. May and Baker opens today at N3.01 per share as against its value-on-board of N2.21 for June. With this, its market capitalisation increased from June’s opening value of N2.166 billion to open today at N2.950 billion, indicating one of the largest upswings in the market within the period. Investors appeared to be looking beyond the immediate to the potential value of the healthcare company.

     

    Investing for future

     

    On the verge of a major breakthrough as a World Health Organisation (WHO)-prequalified pharmaceutical company as well as the activation of its partnership with the Federal Government for local production of vaccines, May & Baker Nigeria’s stock market performance appears to underline investors’ confidence that it could surmount its financial leverage and capital inadequacy as well as harness its expansive capacity to deliver better returns in the period ahead.

    May & Baker Nigeria has invested significantly in manufacturing capacity and research and development in recent years. The completion and commissioning of a World Health Organisation (WHO) prequalified pharmaceutical factory known as the PharmaCentre in 2011 had more than doubled May & Baker Nigeria’s pharmaceutical manufacturing operations. The PharmaCentre is currently undergoing the process for WHO pre-qualification, which will make its products to be internationally accepted, a situation no Nigerian pharmaceutical company currently enjoys. The WHO prequalification will help the nation become self-sufficient in the manufacture of essential medicines and invariably have multiplier effects on the economy notable among, which will be job creation and increased foreign exchange earnings.

    Besides, May & Baker’s subsidiary, BioVaccines Nigeria Limited, a joint venture with the Federal Government, reached advanced stage in perfecting the renewal of the joint venture agreement with the Federal Government on the local manufacturing of vaccines and it is expected to shortly commence local production of vaccines after the agreement.

     

    Still a slow start

     

    Audited report and accounts of May & Baker for the year ended December 31, 2012 showed muted impact of the capacity expansion but its cost burden was evident. Key extracts of the audited report, which was prepared and approved in compliance with the International Financial Reporting Standards (IFRS), showed that turnover continued to rise on the back of recent expansion. Total sales closed 2012 at N5.7 billion as against N4.8 billion recorded in 2011. Gross profit also increased from N1.9 billion in 2011 to N2.1 billion in 2012. Profit for the year stood at N75.9 million in 2012 as against net profit of N222.2 million recorded in 2011.

    The decline in the bottom-line was largely due to depreciation and financing expenses related to the new manufacturing plant that had not begun. Managing director, May & Baker Nigeria, Mr Nnamdi Okafor, highlighted that provisions for depreciation on the over N4 billion new pharmaceutical plant as well huge finance costs, high interest rates and teething challenges with product transfer to the new factory, which severely hampered factory output and revenue realisation also affected the bottom-line in 2012.

     

    Refinancing the business

     

    Recapitalisation is a key issue for May & Baker Nigeria. With the construction and finance of its expansive Ota manufacturing complex affected by the capital market meltdown, the company had little choice than to suspend the development of the new manufacturing complex or turn to bank loans to finance an obvious long-term project. It chose to go ahead with the project, but with the unavoidable mismatch. The attendant high interests and pressures on earnings now pose threats to profitability. While the soft loan from T.Y Holdings Limited, a holding company of Chairman, May & Baker Nigeria Plc, Lt. Gen Theophilus Danjuma (rtd), has significantly reduced the financial leverage of the company, it remains substantially leveraged and financially delinquent.

    Already, the company is considering raising additional capital to support its business expansion and steady itself against competition. Danjuma (rtd) confirmed recently that the company has started considering various ways of raising new capital and would soon choose the most appropriate means to bolster the capital base of the company.

    According to him, it has become expedient for the company to recapitalise to muster enough liquidity to face the challenges of the business environment.

     

    Beyond the present

     

    Beyond the immense opportunities in the WHO prequalification of the company’s manufacturing plant, the imminent renewal of the joint venture agreement between the Federal Government and May & Baker for the local production and distribution of vaccines in Nigeria holds huge prospects for large earnings. The renewal is expected to impact significantly on the prospects of May & Baker Nigeria’s subsidiary, BioVaccines Nigeria Limited. Vaccination is a multi-billion Naira budget for Nigeria, which imports virtually all its vaccines. With several rounds of vaccinations for children and women, BioVaccines Nigeria has a ready market to tap into. The take-off of BioVaccines’ operations will create new income stream and impact on the group performance.

    Besides, for expanding companies, the capacity utilisation in the Nigerian pharmaceutical industry is still low and there is enormous room for growth. With estimated industry value of some N200 billion, capacity utilisation by the plethora of domestic drug manufacturers is around 40 per cent while Nigeria relies heavily on importation. Federal Government’s policy stand that favours local production as indicated by the Local Content Act and recent fiscal adjustments should impact positively on farsighted domestic manufacturers.

    The board and management of May & Baker are also optimistic about the prospects of the group. Okafor said the group expects better results in 2013 based on increased output from its new pharmaceutical manufacturing plant and ongoing business restructuring efforts. According to him, the company also expects to reduce finance costs as a result of a recent access to soft loan provided by Danjuma, which is expected to significantly raise the profitability of the company in 2013.

    He pointed out that its world-class new plant, otherwise known as The PharmaCentre, has raised May & Baker’s production capacity by over 60 per cent.

    Danjuma said the company has rolled out a new five-year strategic plan that would seek to harness all opportunities to increase the group’s earnings and returns to shareholders. He outlined that the company has projected turnover of N9.6 billion for 2013 based on expected increased output from its new manufacturing plant, business restructuring efforts and expected reduction in financing costs following the soft loan received from T.Y Holdings during the last quarter of last year.

    According to him, profit is also expected to increase in 2013 as the company continues to optimise production and cost efficiencies.

    “Our company is well-positioned for the future with a lot of potentials from the strategic investment we have made in Ota and other attractive business prospects in our sight. As we vigourously pursue our new five-year strategic plan with all the opportunities it presents, we can only hope for better performance and stronger earnings capacity going forward,” Danjuma said.

    With the key stakeholders rallying for recapitalisation of the company, investors appear to be taking early positions in the May & Baker Nigeria.