Leading Pharmaceutical manufacturer CIPLAQCIL has announced the acquisition of assets of Quality Chemical’s Limited’s Human health care business portfolio in a deal worth US$ 1.27 million (UGX4.6 billion).

In a statement to the public and its shareholders, the company said the deal which will see transfer of human business assets, including sales staff, is expected to boost the company’s sales growth by expanding its product range.

‘’Pursuant to Rule 38 (1) (a) and Appendix 4, paragraph 1, CIPLAQCIL is pleased to inform its shareholders and the public that the company has signed an agreement to acquire the assets of Quality Chemicals Limited specifically relating to the Human Health  Care Business for the amount of USD 1, 271,747’’ Read the notice by CIPLAQCIL.

‘’The acquisition takes the form of transfer of human business assets including the sales staff overseeing the human health care portfolio. The acquisition is expected to boost the company’s sales growth by expanding its product breadth while tapping into new business opportunities in the private market’’- added the notice.

During their Annual General Meeting (AGM) on August 20, 2020, CEO of CiplaQCIL, Nevin Bradford, said that regardless of the negative impact of Covid-19 towards businesses in the country, the company was focused on driving shareholder value through increased revenues and profitability.

“Even though it was business unusual during the COVID-19 pandemic, CiplaQCIL was fortunate to operate without interruption and even managed to improve attendance and productivity levels during this period. The new financial year 2020/2021 has presented opportunities in increasing the customer base with orders from Botswana for 2.3 million doses of ARVs for adults living with HIV,” he said

As part of CiplaQCIL’s expansion strategy, the company has acquired Quality Chemical Ltd.’s distribution arm of the Cipla India manufactured range of prescription medicines in Uganda. The acquisition takes the form of a transfer of assets of Quality Chemicals Limited, specifically the sales team overseeing the human healthcare portfolio, and is expected to boost the company’s sales growth by expanding its product range while unlocking new business opportunities in the retail distribution market. The transaction will close in the second Quarter,” he added

The acquisition is part of the company’s strategy to drive profitability and sales revenue growth. During their Annual General Meeting on 20^th August, the company said they had set out a target to be registered in 22 countries in Africa this year of which 16 countries have granted approvals, 15 are in progress, and 3 new country applications will be made this financial year.

The acquisition comes at a time when the Kampala based company reported a loss of shs36 billion.

In the financial statements released for the financial year ended March 2020, CIPLAQCIL posted a loss of Shs36 billion compared to a profit of Shs7 billion for the financial year 2018-19

The total assets dropped to Shs248 billion for the year 2019-20 from Shs287 billion in 2018/19.

However, local sales revenue increased by 18 per cent due to increased orders from international health organisations for delivery in Uganda.

The UGX 36 billion losses were attributed to due to the additional impartment allowance, drop in gross margins and increase in interest on draft. The company said in a statement that

‘’The cessation of orders supplied to government of Zambia (GOZ) combined with the impairment allowance for the delayed payments are the principle factors which have resulted in the company recording a loss for the FY 2019-20’’ the company said in a statement.

Despite the challenges, the Executive Chairman of CIPLAQCIL, Emmanuel Katongole said at the AGM that the company was optimistic about returning to significant revenue growth especially if debt collection from Zambia commences.

“The Company is intent on returning to significant revenue growth in 20/21 as well as, of course, a return to profitability. We can be proud though despite numerous challenges, CiplaQCIL continues to deliver on its ethos of “Caring for Life” by producing quality, affordable medicines to ensure that people have access to life-saving medication,” he said.