May & Baker weighs options in new capital raising
MAY & BAKER Nigeria will to raise additional capital to support its business expansion and steady the healthcare company against competition, Chairman, May & Baker Nigeria Plc, Lt. Gen Theophilus Danjuma (retired), has said.
Danjuma said the said the was weighing various options of raising new capital and would soon choose the most appropriate means to bolster the capital base of the company.
The chairman, who was speaking at annual general meeting of the company in Lagos on Thursday, said it had become expedient for the company to recapitalise to muster enough muscle for emerging competition.
According to him, huge investments in the world-class pharmaceutical manufacturing centre in Ota, Ogun State, the company's vaccine manufacturing joint venture with the Federal Government, new products and other initiatives will provide a stable base for the company's growth in the years ahead.
The retired general turned business mogul said the company had 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 said that the company was projecting turnover of N9.6 billion for 2013 based on the optimism 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 2012.
He added that profit is also expected to increase in 2013 as the company continues to optimize 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 vigorously 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.
He said the company had reached advanced stage in perfecting the renewal of the joint venture agreement with the Federal Government on the local manufacturing of vaccines .
He noted that it would shortly after the agreement commence local production of vaccines.
Danjuma called for a deliberate policy by the various arms of government in Nigeria to buy locally produced products and services pointing out that an example of this practice has begun in the health sector where the Federal Ministry of Health deliberately encouraged local drug makers with exclusive purchase of Anti-Retroviral drugs valued at over N2 billion in 2012.
Danjuma decried the situation where multinational drug companies are currently invading the Nigerian market with finished pharmaceutical products.
'Multinational drug makers who are avoiding the economic crisis in Europe turned to Nigeria as an attractive market with large, growing population and emerging middle class. Many of these companies are however interested in bringing in their finished pharmaceutical products which will compete with locally manufactured products', Danjuma said.
He said May & Baker has raised her capacity to produce more products with the construction of a world class pharmaceutical centre known as the May & Baker PharmaCentre located in Ota Ogun State.
The PharmaCentre is one of the few Nigerian pharmaceutical facilities seeking international certification by the World Health Organization. He called on government to encourage local firms who are making efforts to improve the quality of their products to international standards.
Audited report and accounts of the company for the year ended December 31, 2012 showed a turnover of N5.7 billion, 18 per cent increase over its 2011 figure of N4.8 billion. Gross profit also grew to N2.1 billion as against N1.9 billion in 2011.