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Indian health firm to take over CAPS

06 Apr, 2018 - 06:04 0 Views
Indian health firm to take over CAPS

eBusiness Weekly

Africa Moyo
A top Indian health firm, Ajanta Pharma, has signed a letter of intent with Government to take over CAPS Pharmaceuticals and revive its operations.

Further, the company intends to set up a top-notch hospital and medical college to train health practitioners.

The investment is expected to top $1 billion in years’ time.

Ajanta officials were lured into investing in Zimbabwe’s health sector by Acting President, General Constantino Chiwenga (Retired), when he visited India recently.

Yesterday, Ajanta’s top officials including co-founder and vice chairman, Madhusudan Agrawal, visited CAPS Pharmaceuticals to appreciate its state.

They later held a closed door meeting with Acting President General Chiwenga (Rtd), Zimbabwe’s Ambassador to India Maxwell Ranga, Health Ministry Permanent Secretary Dr Gerald Gwinji and Reserve Bank of Zimbabwe Governor Dr John Mangudya, among other senior Government officials.

Agrawal later told journalists that they are keen to invest CAPS Pharmaceuticals.

“This (yesterday) morning we visited CAPS Pharmaceuticals, a 66 year old pharmaceutical company. It is not in a good shape, all the machinery; 90 percent, is not there,” said Agrawal.

“Once upon a time, this was the best company of Zimbabwe exporting (medical drugs) to many other countries in Africa.

“We decided we are going to sign a letter of intent today, that our group will take over this company and change it to a new company with new machinery, with new technology and make Zimbabwe self-sufficient in pharmaceuticals.”

Agrawal could not be pressed to reveal the size of investment they intend to commit into CAPS Pharmaceutics, saying a team of experts would have to come first and make an assessment.

CAPS Pharmaceuticals is currently in dire straits, with about 100 employees and chalking an annual business of about $4 million.

The company produces several drugs including 4Cs children’s cough syrup, paracetamol, ibuprofen, metronidazole, caprin, Mr Strong and fibrosal heat rub.

Last year, there were reports that the firm was looking for $6 million to recapitalise its operations.

But Agrawal believes once they hit full capacity, they will do business worth about $14 million per year.

To underscore its commitment, the group has already registered a company in Zimbabwe, Mamta Natural Resources (Z) Pvt Limited.

Officials were expected to also open a local bank account. They expect to start serious work on the ground in three months’ time, all things being equal.

Going forward, Agrawal said they will construct a “world-class” hospital to take care of citizens’ and foreigners’ health care requirements.

“Also, we will put a medical college here to train the people; they will become medical doctors (and will not) have to go to London and South Africa, they will get it (training) here.

“Nursing college, we can (also) put here. In three years, our group can look at investment of more than $1 billion,” said Agrawal.

The company would also provide services such as cataract surgeries and fighting malnutrition.

In the next few days, the company will hand over a gift of anti-malaria products worth $50 000.

Ajanta has been involved in the health care sector for the past 44 years, but has recently been investing heavily in the mining sector.

The Indian firm also intends to invest in the local mining sector, and its officials were set to meet Mines Minister Winston Chitando to thrash out deals.

Dr Gwinji said the proposed investment by the Indians means essential medicines would be readily available and the company will navigate foreign currency issues.

“Recall that a couple of years back we could supply all local industries up to 80 percent of what we needed but now it’s down to about 5 percent.

“So with their coming in, we know that we get back to that easily and therefore we can make provision of health services much easier,” said Dr Gwinji.

RBZ boss Dr Mangudya also said once the important transaction comes to fruition, it will help the country reduce demand for foreign currency.

At the moment, Zimbabwe is blowing $400 million in the exportation of medical drugs per year.

Dr Mangudya added that the foreign currency saved would then be channelled towards other sectors.

He also said the coming in of the Indians illustrates that the ‘Zimbabwe is open for business; mantra is bearing fruit.

Ambassador Ranga said more Indian investors are expected, buoyed by the amendments to the Indigenisation and Economic Empowerment Act whereby the 51/ 49 percent shareholding structure that favoured locals would now apply only to diamonds and platinum.

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