In this interview with Yusuff Moshood, Mr Varkey Verghese, founder and managing director of the Jawa Group of companies, spoke on how Jawa overcame the challenges it faced at inception and rose to its present level as one of the top ten pharmaceutical manufacturing companies in Nigeria. Verghese, who received the prestigious Member of the Order of the Federal Republic (MFR) national merit award in 2001, also spoke on measures that can be taken to transform the pharmaceutical sub-sector and enable it contribute more to the Nigerian economy. Excerpts:
Pharmaceutical manufacturing business in this clime is a venture seriously hampered by a number of challenges. You could have chosen other businesses that are less problematic but still chose to invest in pharmaceutical manufacturing business, what prompted your decision?
Pharmaceutical business is indeed very challenging, particularly manufacturing. The reason we chose pharmaceutical manufacturing business is because of certain basic criteria. First, for human beings, the following are basic essentials – food, shelter, clothing and healthcare. Health care provision is essential and we require it as a basic requirement in all situations.
As a person, I have always been interested in helping to enhance the quality of life of people and I am happy doing this through healthcare delivery. We also know that Nigeria has a huge population and the potential for growth for healthcare business is very high compared to all other African countries.
Jawa started in the 90s with about five OTC products, but the company now has over 50 products covering diverse therapeutic range, how did you manage this remarkable growth?
Jawa started with five products and 50 staff members. Yes, we have achieved reasonably modest growth in our business despite the fact that we were hit badly by a serious challenge two years after we commenced production and faced a similar challenge again about three years after we had the first problem. Regardless of these challenges, God Almighty gave us the grace and wisdom to take every challenge as an opportunity to grow.
The challenges we faced had to do with the withdrawal of two of our shareholders at an interval of two years each, after the commencement of operations. It was a serious setback.
Apart from the pull out of our shareholders, we also inherited a bank loan at the time the partition was done. However, by God’s grace we were able to overcome the challenges and got to this stage. I would attribute our success to the support of our staff from the lowest to the highest. They all stood and supported the management at the most critical time, even when we could not meet salary obligations. Some expatriates managers left but my Nigerian colleagues, particularly the seniors, stood with us.
Two other factors also aided our growth as a company. The first is the goodwill of our customers and the quality of our products from inception; the second is the patronage of Jawa’s products by our valued distributors, wholesalers, retailers, government and hospitals both in the public and the private sectors. Currently, we have 425 staff working for the Jawa Group. We have three divisions, namely,OTC drugs, ethical drugs and veterinary drugs.
For our OTC Drugs division, we have haematonics, antacids, cough syrup, anti-diarrhoea, anti-malaria syrups and multivitamins. We also make external liquid preparation. Apart from this, we also make ointment and creams,including antiseptic, antifungal and muscular relief drugs.
For our Ethical Drugs division, we have antibiotics, antimalarials, anaesthetics and other injectables imported in our own brand name.However, for our Veterinary Drugs division, we manufacture anti-helmenthetics for deworming, as well as multivitamins and anti-septic ointments.In all, we have 117 registered products with NAFDAC and another 42 products under registration with NAFDAC.
The impressive support of Nigerians for our company and products informed our decision to also pay back to the society for every unit of product we sell in Nigeria. This is to ensure we contribute to the community in a positive way. Some of our Corporate Social Responsibility (CSR) activities include donation of drugs for ante-natal care, child health, and accident & emergency interventions in Osun, Oyo, Ondo, Ekiti, Katsina and Cross River States.
We also donated drugs and clothes to the Internally Displaced People (IDP)’s camp in Yola, Adamawa State, as well as a delivery van to the Kano State Drug Medical Agency and the Katsina State Ministry of Health.
Also, as part of our CSR and on humanitarian grounds, some patients known to us through our customers and friends were sponsored for treatment in India for ailments like heart surgeries, cancer, liver abscess, bone surgeries, etc. We equally partnered with the Tulsi Chanrai Eye Foundation and conducted free eye operations for 450 patients across the country.
We take CSR seriously and I can assure you that for every unit of Jawa product you patronise, a portion goes back to the community to touch lives.
Last year (2014), four pharmaceutical manufacturing companies in Nigeria attained the WHO prequalification status. How do you see this new trend of local pharmaceutical manufacturers going for the WHO prequalification and what can the government do to ensure these companies and the entire populace benefit from the prequalification status?
Getting the WHO prequalification by four companies is a very big achievement and Nigeria can be very proud of this. In the whole of Africa, Nigeria is the only country where four manufacturing plants are accredited. This has opened the eyes of many manufacturers in Nigeria. The WHO accreditation, which was considered not achievable in Nigeria is now achievable. This has encouraged many others to follow suit and we hope many more will get qualified.
To further improve the pharmaceutical sector, the federal government should consider having a pharmaceutical sector development fund as they have done for the textile and agricultural sectors. The Bank of Industry should also be adequately funded to enable it deliver on its mandate.
The pharmaceutical industry as a sub-sector of the Nigerian economy has been said to have the potential to contribute more to both national income and wellbeing. As a key player in this sector for years, how true is this and what factors are impeding the industry from realising its full potential?
The pharmaceutical industry as a sub-sector of the economy is worth three billion United States dollars (USD) which clearly shows that it has a potential to contribute more to the Nigeria economy and still there is room for growth. The main impediment is lack of patronage by government agencies and the political will not to accept funds from donor agencies that will always prefer to buy from foreign companies. Nigeria, while accepting donor funds, should insist on the sourcing of the products from local manufacturers.
How can we stop the huge dependence of Nigeria and Nigerians on external sources (importation) for local medicine needs?
There are 120 pharmaceutical manufacturers in Nigeria in the category of small, medium and large; and all the companies put together have the capacity to produce 70 per cent of the country’s requirements. This can be achieved over a period of five years, provided the federal and state governments can support the pharma sector through adequate long-term funding to expand and upgrade existing facilities, patronage of local manufacturers, and increase in the medicines on import prohibition list, especially those medicines that can be manufactured locally.
Also, importers should not be allowed to bring in products that can be made in Nigeria. This alone will help to improve the capacity utilisation of existing plants.
It may be equally worthwhile to see how other nations achieved self-sufficiency in local manufacturing. Take the examples of India and China. They were closed economies for a long time and this did not allow any importer to come in. During this period, companies operating in those two countries looked inwards and developed local industries which have matured to great heights. They have now opened their countries to importation from outside; but other countries are not able to compete with them because of the economy of scale they have achieved.
It is worth emulating such countries so that Nigeria can become self-sufficient not only to meet local demands but to also export products to other countries.
In our quest to rid the nation of the menace of fake drugs, are there things we should be doing that we are not doing? How can we further strengthen the fight against drug counterfeiting?
I commend the NAFDAC for the war against fake drugs. The introduction of the Mobile Authentication Service (MAS) sticker for selected products by NAFDAC is a welcome development and, in due course, it should be expanded to other products also.
However, it is important to state that fake drugs usually enter the country basically through three avenues- seaports, airports and land borders. Therefore, if the federal government and NAFDAC can properly police the loopholes at these entry points, it will go a long way to minimise the problem of fake drugs. NAFDAC should equally be adequately funded and equipped to consistently deliver on its mandate.