Neimeth Eyes Fresh Capital for Expansion Amid Forex Woes and Growth Plans
Key Highlights:
Neimeth International Pharmaceuticals is considering raising fresh capital to support its expansion plans.
The company recorded a 102% revenue growth in 2024 despite a ₦2.03 billion forex loss.
Plans include restructuring foreign-denominated loans, localizing raw material sourcing, and expanding manufacturing capacity.
Calls for long-term capital investment to support Nigeria’s pharmaceutical industry amid high borrowing costs.
Neimeth’s Expansion Strategy: Raising Capital and Strengthening Operations
Neimeth International Pharmaceuticals Plc is exploring the possibility of raising fresh capital from the Nigerian capital market to finance its expansion and strengthen operations.
Speaking at a media parley in Lagos, the company’s Managing Director/CEO, Valentine Okelu, stated that a final decision would be made at an upcoming strategy session with board members.
️ “The decision to raise fresh capital is not ruled out. We are set to review our strategies, expansion plans, and funding needs. If required, we will approach the capital market to raise capital,” Okelu said.
Tackling Forex Losses and Financial Stability Measures
Despite a ₦2.03 billion forex loss in 2024, Neimeth is implementing strategic measures to stabilize its financial position:
✅ Restructuring Foreign-Denominated Loans – The company is converting its dollar-based loans into naira to shield itself from forex volatility.
✅ Negotiating Extended Payment Terms – To improve cash flow, Neimeth is renegotiating debt repayment schedules.
️ “We are aggressively restructuring our foreign loans and extending payment terms to create financial headroom,” Okelu added.
Strong Revenue Growth Amid Challenges
Despite forex setbacks, Neimeth recorded remarkable financial growth in 2024:
Revenue surged by 102% to ₦4.5 billion (from ₦2.2 billion in 2023).
Gross profit jumped by 170%, driven by cost-cutting measures.
The company reversed a ₦1.3 billion loss from 2023, achieving an operating profit of ₦338.5 million.
Cost-saving strategies were key to this turnaround:
Marketing and distribution costs dropped from ₦792.3 million (2023) to ₦578.7 million (2024).
Administrative expenses fell from ₦868.1 million to ₦558.0 million.
Local Sourcing and New Product Pipeline
A core part of Neimeth’s strategy is localizing raw material sourcing to reduce import dependence and manage costs.
️ “Ciklavit, our sickle cell management drug, is 99% locally sourced. We are also launching a new hypertension and diabetes medication using locally available ingredients,” Okelu revealed.
Expansion into Modern Manufacturing
Neimeth is making bold moves to expand its manufacturing capacity and research capabilities:
Upgraded its Lagos production facility.
️ Constructing a WHO-compliant plant in Anambra State, set to become a pharmaceutical research and manufacturing hub.
️ “This new facility will position Neimeth to tap into opportunities under the African Continental Free Trade Agreement (AfCFTA),” Okelu stated.
⚠️ Challenges: High Borrowing Costs and Infrastructure Deficits
Neimeth’s CEO highlighted access to sustainable financing as a major challenge for pharmaceutical manufacturers in Nigeria.
⚠️ “With current lending rates, borrowing from banks is unsustainable for manufacturers,” he noted.
Call for Long-Term Investments:
Government and wealthy investors must provide long-term capital for the pharma sector, as it has longer gestation periods than other industries.
️ “Pharma investments take years before yielding returns. We need patient capital to support this sector,” he emphasized.
⚡ Rising energy costs remain another significant challenge.
️ “The cost of power and energy is a major challenge. Since we can’t pass these costs to consumers, it affects our bottom line,” Okelu concluded.
Looking Ahead
With strategic cost management, localized sourcing, and infrastructure expansion, Neimeth is positioning itself for long-term growth. However, raising capital will be critical to sustaining its expansion while managing forex volatility and operational challenges.
Investors will be watching closely as the company finalizes its capital-raising decision in the coming weeks.
Key Highlights:
Neimeth International Pharmaceuticals is considering raising fresh capital to support its expansion plans.
The company recorded a 102% revenue growth in 2024 despite a ₦2.03 billion forex loss.
Plans include restructuring foreign-denominated loans, localizing raw material sourcing, and expanding manufacturing capacity.
Calls for long-term capital investment to support Nigeria’s pharmaceutical industry amid high borrowing costs.
Neimeth’s Expansion Strategy: Raising Capital and Strengthening Operations
Neimeth International Pharmaceuticals Plc is exploring the possibility of raising fresh capital from the Nigerian capital market to finance its expansion and strengthen operations.
Speaking at a media parley in Lagos, the company’s Managing Director/CEO, Valentine Okelu, stated that a final decision would be made at an upcoming strategy session with board members.
️ “The decision to raise fresh capital is not ruled out. We are set to review our strategies, expansion plans, and funding needs. If required, we will approach the capital market to raise capital,” Okelu said.
Tackling Forex Losses and Financial Stability Measures
Despite a ₦2.03 billion forex loss in 2024, Neimeth is implementing strategic measures to stabilize its financial position:
✅ Restructuring Foreign-Denominated Loans – The company is converting its dollar-based loans into naira to shield itself from forex volatility.
✅ Negotiating Extended Payment Terms – To improve cash flow, Neimeth is renegotiating debt repayment schedules.
️ “We are aggressively restructuring our foreign loans and extending payment terms to create financial headroom,” Okelu added.
Strong Revenue Growth Amid Challenges
Despite forex setbacks, Neimeth recorded remarkable financial growth in 2024:
Revenue surged by 102% to ₦4.5 billion (from ₦2.2 billion in 2023).
Gross profit jumped by 170%, driven by cost-cutting measures.
The company reversed a ₦1.3 billion loss from 2023, achieving an operating profit of ₦338.5 million.
Cost-saving strategies were key to this turnaround:
Marketing and distribution costs dropped from ₦792.3 million (2023) to ₦578.7 million (2024).
Administrative expenses fell from ₦868.1 million to ₦558.0 million.
Local Sourcing and New Product Pipeline
A core part of Neimeth’s strategy is localizing raw material sourcing to reduce import dependence and manage costs.
️ “Ciklavit, our sickle cell management drug, is 99% locally sourced. We are also launching a new hypertension and diabetes medication using locally available ingredients,” Okelu revealed.
Expansion into Modern Manufacturing
Neimeth is making bold moves to expand its manufacturing capacity and research capabilities:
Upgraded its Lagos production facility.
️ Constructing a WHO-compliant plant in Anambra State, set to become a pharmaceutical research and manufacturing hub.
️ “This new facility will position Neimeth to tap into opportunities under the African Continental Free Trade Agreement (AfCFTA),” Okelu stated.
⚠️ Challenges: High Borrowing Costs and Infrastructure Deficits
Neimeth’s CEO highlighted access to sustainable financing as a major challenge for pharmaceutical manufacturers in Nigeria.
⚠️ “With current lending rates, borrowing from banks is unsustainable for manufacturers,” he noted.
Call for Long-Term Investments:
Government and wealthy investors must provide long-term capital for the pharma sector, as it has longer gestation periods than other industries.
️ “Pharma investments take years before yielding returns. We need patient capital to support this sector,” he emphasized.
⚡ Rising energy costs remain another significant challenge.
️ “The cost of power and energy is a major challenge. Since we can’t pass these costs to consumers, it affects our bottom line,” Okelu concluded.
Looking Ahead
With strategic cost management, localized sourcing, and infrastructure expansion, Neimeth is positioning itself for long-term growth. However, raising capital will be critical to sustaining its expansion while managing forex volatility and operational challenges.
Investors will be watching closely as the company finalizes its capital-raising decision in the coming weeks.