eBusiness Weekly
Fradreck Gorwe
Zimbabwe Stock Exchange-listed manufacturer and distributor of health, hygiene, beauty, and pharmaceutical products, MedTech Holdings (MMDZ.zw) has a long history characterised by steadfastness and perseverance in the face of haemorrhaging realities.
The company produces pharmaceutical products for wholesale distribution to retail pharmacies.
Main segments include the fast-moving consumer goods (FMCG), Medical and Manufacturing. Under FMCG segment falls MedTech Distribution, Smart Retail and Choice Brands.
MedTech Distribution is an import and distribution wing that represent brands from various countries and distribute them throughout Zimbabwe.
The Medical Segment encompass MedTech Medical and Scientific (Private) Limited (MMS) and Education and the Laboratory Services Division. MMS sources local and imported pharmaceuticals for the health care sector while the services division maintains hospital and laboratory equipment.
Under the manufacturing segment falls Chicago Cosmetics (Private) Limited in Ruwa.
The holdings company got listed on the Zimbabwe Stock Exchange in 1997.
Acquisitions formed part of the growth strategy with disposals central to the company’s rationalisation and restructuring exercises.
First and major was the acquisition of full shareholding in Zimbabwe Pharmaceuticals (Zimpham) in Bulawayo. Zimpharm was formed in 1992 after Wellcome Pharmaceuticals sold its interest in Zimbabwe.
In 2002, the company acquired Zimbabwe’s then largest imaging business, Bololgna Investments aka Baines Imaging group. Following was the acquisition of Margolis Medicals in 2003.
Margolis produced sanitary pads, theatre caps and plastic gloves. Strategis MARS, a company involved in ambulatory care, was acquired in 2005.
In 2007, the company disposed of its subsidiary, Baines Imaging, to its previous shareholders. This was followed in 2010 by the closure of plastic and textile divisions after a tremendous loss due to capital inadequacy coupled with low production at Zimbabwe pharmaceuticals.
The company further sold 49 percent equity of its subsidiary, MedTech Distribution, to Titanium Marketing and Distribution, a company owned by Afzal Motiwala (then a non-executive director).
In 2012, MedTech sold its 40 percent stake in Zimpharm to Nu Age Cosmetics, a Dubai-registered company. The remaining shareholding was sold to a local firm due to dwindling local demand for the associate’s products. Zimpharm had incurred after tax losses of $733 651 for the 11 months to November 30, 2012.
Disposal of units was reflective of the liquidity crunch that had haunted the company for long. The disposal was said to have paid off as successive revenues indicated a fair comparison of continuing operations.
In 2013, the company further acquired 20 percent shareholding in an associate company, MedTech Food and Beverages Limited (MFB).
Between 2014 and 2016 the group was plagued by uncertainties as equity reserves significantly depleted due to operating losses. This cast doubt on the ability to sustain as a “going concern” but cost cutting measures were drawn for implementation to maintain the going concern status into the future.
Further, the company in 2018 commissioned a new plant at Chicago Cosmetics in Ruwa. The plant is set to boost the number of locally produced product lines from the current 2 400 lines. Margins are also expected to soar in the future as the plant becomes fully operational.
As updated on October 15, 2019, the counter held a market capitalisation of $21 886 307 with a share price of 0,72 cents.
Afzal Motiwala is the group chief executive officer.
