Industry and Commerce Minister Mike Bimha said Zimbabwe’s struggling pharmaceuticals industry required $80 million fund operations to boost capacity utilisation. The industry, which employs over 1000 people, is currently made up of nine companies, whose operations have been choked by the constrained macro-economic environment.
Minister Bimha told a visiting Chinese business delegation that the industry was operating at around 20 percent capacity. “The Pharmaceuticals Manufacturers Association is proposing that a facility of $80 million for upgrades and retooling on manufacturing plants be put in place,” Minister Bimha said. “The facility should be at 10 year tenure and interests rates of below five percent.” Absence of cheap long term financing in the market has hit several companies, with local banks only offering expensive short to medium term loans.
Minister Bimha said one of the major causes of low capacity utilisation in the medicines industry was government’s failure to fund drug purchases for public hospitals. “The public sector accounts for more than 70 percent of the local industry’s market,” Bimha said. Government is struggling to fund its operations due to a liquidity crunch gripping the economy that has been fuelled by absence of new investments.
Minister Bimha said the industry would be able to employ over 3 000 people if its capacity utilisation improved to around 70 percent. Officials in the drugs industry say some companies have, in a bid to improve their performance, tried to expand their markets across borders to countries including South Africa, but have failed due to stringent licensing conditions in those countries.