Strong demand for Medtech products

DIVERSIFIED health care group Medtech Holdings’ turnover for the half-year to June 2011 rose 43% to US$4,6 million driven by strong demand for its products.

Medtech said volumes at ZimPharm were recovering at a modest rate. Production of the Deltaprim tablets as well as the Alpha and Beta range of products had started.

The firm was not producing in the first quarter, but may reach breakeven volumes by December.

Medtech said the manufacturing division operations were being constrained by unrealistic National Employment Council wage increases of up to 24 percent as well as serious power supply interruptions.

But the significant growth in revenue could not translate into profitability due to losses in the manufacturing division. Medtech recorded a loss of US$227 000, which was a slight decline from the US$291 000 loss that the pharmaceutical group posted in the same period last year.

The company underperformed during the period due to working capital limitations.

During the first half of the year Medtech enjoyed notable profitability in the distribution business but the profits could not cover losses recorded in the group's manufacturing division, Zimbabwe Pharmaceuticals.

Meanwhile, profitability at Medtech's trading division was subdued due to low volumes from ZimPharm. Profitability at the distribution unit, however, picked up as production at ZimPharm gradually improved.

The company said it has since obtained pharmaceutical licences and opened trade lines with major India-based pharmaceutical manufacturers, which is expected to boost volumes in the outlook period.

Post published in: Business

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