Pascal Briere is the President of Biogaran, a subsidiary of France-based Servier Group, which recently announced the takeover of the over the 41-year-old Swiss Pharma Nigeria Limited (Swipha). In this interview with Ibrahim Apekhade Yusuf, Briere speaks on the prospects of the deal as well as strategic plan to turnaround the fortunes of the ailing company. Excerpts:

Why are you in Nigeria?

I’m very glad to announce to you that we have just acquired vast majority shares in Swiss Pharma Nigeria Limited (Swispha). We now own 95 per cent of the shares of Swispha and the closing of the deal was concluded few days ago. So it’s a very important day in the history of Swispha in Nigeria as well as for Servier, the holding company of our Group as well as Biogaran.

As the new owner, what will you do differently?

We have a plan here, which we have been working on in the last few months and we’ve most of the taskforce here with me, which are people from Biogaran. Our plan is threefold. The first one is to restart the company. The company is operating below installed capacity, frankly speaking. The sales have sharply decreased. They’re making losses; they’ve big debts and so on. So we first need to reshuffle and restart the company, which is almost on hold. We really need to do basic things during the first few months very quickly, which is to resume sales, look at the inventories, import active ingredients and raw materials necessary to manufacture here, resume production. This is because the factory has been running at a very low pace and we need to restart adequate promotion to physicians, pharmacists and patients. They’re very basic things but also very difficult. It therefore calls for preparation including hiring the right missing people because the current CEO will resign. He is 65 years old and so we’ve to find a new CEO. That’s the first step.

Then the second fold is to develop a strategy plan for the next three-five years. The strategy plan will be based on strategy for root to the market, promotion to physicians and other categories, size of the sale force and portfolio management. So within the next three months, we will start work in earnest on portfolio management in order to enhance the quality of Swispha.

The third is to develop production and production installations here. We will check what kind of products we can bring in or manufacture here according to pharmaceutical technology we have here, which is standard technology, state-of-the-art technology. Swispha invested over $5million in the factory to get ISO and WHO approval. So we need to build on the assets to ensure quality. These are threefold strategy. So we will go on a step by step basis because it’s a risky business. To do business in Nigeria isn’t that easy everybody knows.

You just told us why you’re investing in Nigeria. Could you tell us the share of your equity in dollar or naira term?

The amount we have spent I’ll keep it confidential. I can’t disclose. But why we’re investing in Nigeria is very simple. You’ve 185million population here in Nigeria and the access to medicine is increasing every year. You’re facing decrease in the Nigerian economy and there is tough time for people if you consider the cash crunch, forex scarcity. But I’m pretty sure the economy will resume fully if not next year or sooner because Nigeria is a very rich country. You have access to raw materials, enormous resources, the population is very dynamic, very energetic and Nigerians are entrepreneurial people. So we trust in Nigeria because there are so many people are optimistic that the economy will resume for sure one day and we’re prepared to suffer tough times. We know this will not be a straight-line and there will be many ups and downs. But that’s life. So we’re not scared about this. What is most important thing is to note that our company, our shareholding structure as a foundation enables us to have a long-lasting strategy here and to consider what the others consider risky as a huge opportunity. We’re prepared to invest again and again to develop the local content. But this special shareholding enables our company to invest in some risky countries like Nigeria and there are not so many people I know that are investing in the country. So I’m very glad to be one of those that are investing in Nigeria. We want to make Swispha a big company in Nigeria and there‘s a room for that. There‘s no reason why we can’t succeed and this is because the country has entrepreneurial knowledge in the pharmaceutical industry, and Swispha has even been able to get ISO 90001 and the WHO approval. So there are skills here and we’re going to take up those skills.

Are you also going to change the personnel and what would be the local content component of your products now?

First and foremost, Swispha is a subsidiary of French Group but it will remain a Nigerian company belonging to a European Group and benefiting from European standards and French know-how. That’s very key. So, the people in Swispha will be mostly the vast majority of Nigerians. We’re not going to bring in thousand expatriates not even one. We’re going to use Nigerian people with close working relationship with the taskforce at Biogaran based on expertise and know-how. The taskforce working in collaboration with the staff on ground would help to develop the standards.

To the second leg of your question, as far as the products are concerned, none of the active ingredients used in the pharmaceutical sector is produced here and even across the West African subregion. As we speak, there is no chemical production factory for active ingredients here in Nigeria or even in the subregion. All the active ingredients being used are imported. Okay. If you talk of local content, it’s mainly for aluminium, packaging and all that. All the active ingredients we’re going to use will be imported. There are say 50 different technologies in the pharmaceutical industry and hopefully, we have some here. But I can tell you for a fact that no factory has every technology domiciled in one single place. No.

Interestingly, Swispha has two assets. The first one is the brand, which is fantastic and well-known, and it’s associated with reputation of quality and the second is the factory, which is certified by NAFDAC, WHO. So we want to have more production. We’re going to participate with the Nigerian community and bring in new jobs, new capabilities and try to operate our factory at 100 per cent capacity. It’s currently operating at 30-40% capacity. But we want to bring it up to operate at full capacity.

The pharmaceutical ecosystem in Nigeria does not have comparative advantage unlike its counterparts abroad in terms of factors of production like cost, research and development and all that. What are you going to do to bridge some of these gaps?

Nigerians know that at the market, there are different prices for products. So I won’t address the problem in terms of competiveness. I will address the problem in terms of quality. Because if you have different products at different prices in the market, the unknown brands to the best well known brands, there is a good reason for that. And the reason behind is quality. So we are not going to be the lowest price company. It’s not good for us. It’s not in our DNA. Swispha’s DNA is to ensure that people that are taking our drugs are taking quality products. Of course, quality product has a cost. But this cost must be affordable to most of the people. A product that has no cost very often is of low quality. I understand there are no incentives for pharmaceutical industries but there may be some advantage for the Nigerian manufacturer of products. And I understand the government is looking to set up a plan I have heard, to enable more funding for the pharmaceutical industry to have more streamlined process for access to forex and so on. This would considerably help because that’s the reason why the Nigerian pharmaceutical industry is having a competitive disadvantage compared to those that are getting easy access to forex and active ingredients and so on.

There are opportunities in pharmaceutical exports but that is nonexistent in Nigeria. Based your experience in pharma business, is it an area you want to explore?

First of all, our focus will be Nigeria. We want to be able to make our products reach everybody in the country to make them aware of Swispha before we can consider reaching out to other parts of West Africa and also to reach French-speaking countries as well. We already have a strong Nigerian base. It’s a long term plan. We know NAFDAC is keen on seeing some Nigerian products exported to foreign companies. That’s part of the future of Swispha. But first, let’s get the Nigerian market on track. We need to keep our plans very modest and stay quiet and calm and not to make mistakes. It’s a very different country and I don’t trust we can rollout European strategies here that would not be that efficient I guess. So let’s listen, let’s be held by time and let’s do it calm and quiet but very determined.

Talk about cautious optimism…

Absolutely yeah.

Still talking about long-term plan, you can count how many pharmaceutical businesses are quoted on the Stock Exchange. Is it something you want to consider for the future?

No, it’s not part of the culture of our company. It’s not compatible with us. Our approach usually is to adopt long-lasting strategies in the countries we operate. We would rather reinvest our dividends in developing the market more to have global reach. If we have earnings and dividends then it better to reinvest such in the business. It’s fully incompatible with being quoted at the Stock Exchange.

Do you think the regulatory framework existing is okay or are there gaps you think the government can address?

It’s a very important question because we’re in an industry which is very highly regulated. We have the rules of the market which deals with pharmaceutical products. The contact we have at the highest level in NAFDAC makes us rather confident that the system in place is quite effective. We see that the system doesn’t have too much encumbrances. But we do expect more support from the authorities to enable us to do business. There are some countries that are very tough with regulations and you cannot rely on yourself to do anything as you’re always at the mercy of the authorities. You have some people on the pharmaceutical industry in Nigeria that are regulated, they follow regulation and all. That’s okay. It’s a pure normal game. And then you have a market that is almost unregulated, where you find that some counterfeit products coming in without approval. And that is a concern for the authorities and for the industry because we’re competing with people who obviously don’t play by the rules. But it’s a game at the end. So we need to play by the rules of the game. If we don’t want to play by the rules, we cannot come in. But I’m certain that regulation will increase in the next few years. The thing is that the more we can be able to supply the market, the less issues we will have with counterfeit products in the market. The first is to produce and then trust that the government will be efficient in their job.

Having said that, the problem of overregulation of the economy is difficult without access to forex, which is tremendously complicated right now. It’s best to have a free market for forex. It’s important to rejuvenate the economy. It’s free economy. We need to say that. Regulation in the economy seems not to be that difficult to do business here. In France, we have a very much regulated economy. Everything is regulated. Taxes are enormously high, 57% of the GDP is made from taxes. So we’re used to that kind of thing. I feel that here is more a liberal economy and we are okay with that. But the main issue is access to forex and the interest rate. The interest rate is around 20-25% for a company. It’s impossible. You need to have deep pockets and we don’t have that and most of the pharmaceutical industries don’t have deep pockets.

In terms of practice how deep enough do you think is the pharma business in Nigeria and what do you hope to bring to bear in the sector as one of the major players?

Our hope is to remain the major player here. We have very serious players here among the Nigerian-owned companies the likes of Emzor, May & Baker: they are serious people. They are among those leading the market here. They have very specialised products. The future of pharmaceutical industry here is very bright. For us, the primary healthcare business is mainly what we’re going to address. And considering the increase in the middle class there will be more people that have access to medicare. And we intend to play that role. Specifically, we want to be the one that is providing Nigerian people quality products for primary care and we want people to see Swispha as a mark of quality in terms of our products. Ours may not be the best product in pricing but will definitely be the best in terms of quality. That’s very important.