Business reporter
Government’s intervention through a capital injection of US$6.9 million into the CAPS Holdings has seen a far-reaching expansion of the company’s pharmaceutical operations, The Harare Post has learnt.
Government came to the rescue of the country’s largest pharmaceutical in 2016. The Reserve Bank of Zimbabwe has so far injected a total rescue package of US$6.9 million of which US$4.3m was for salary arrears, while US$2.6m was allocated for raw materials and utilities.
A contact within the company said before the capital injection, the company’s pharmaceutical subsidiary, CAPS Pharmaceuticals had only 24 product lines. He said the company now had 100 product lines although it is expected to have 120 product lines, which it used to produce during its peak period.
“The capacity utilisation for liquid medicine is now nearing 100% while that of the tablets sector stands at 40%. The capacity utilisation stood at 30% and 5% respectively in pre-Government intervention era,” said the source.
The source said the Penicillin, Auto sterile and Infusion plants which had stopped working, were re-opened in October 2019. She said the company had been re-introducing one product per month.
“Before the injection, the company had 48 factory workers in its employment as compared to the current establishment of 120 factory workers. The figure is expected to grow,” said the source.
Government acquired 68% shares in a $60 million deal from Fredrick Mutanda in the holding company, CAPS Holdings in December 2016. The shareholding structure was expected to automatically translate to the subsidiary companies such as CAPS Pharmaceuticals. However, CAPS Pharmaceuticals Trust which claims to own 51% shareholding in CAPS Pharmaceuticals argues that Government only bought into the holding company and not the pharmaceutical company. As such, the Trust took Government to court objecting the shareholding structure.
“The Trust took Government to court after (Sekai)Nzenza (Minister of Industry and Commerce) appointed a new board for CAPS Pharmaceuticals in November 2020.
“However, the two parties have agreed on a legal route to solve their dispute with retired Supreme Court Judge, Ahmed Ebrahim expected to preside over the pre-arbitration conference on 21 May, this month,” said the source.
