8 months ago
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With contracting margins in other divisions and limited markets for the time being, Seprod subsidiary A.S. Bryden & Sons Holdings Limited is looking to its pharmacy division for more growth.
CEO Richard Pandohie says the division already contributes significantly to the sales of the Trinidad-based company. He wants to grow the contribution to as much as 20 per cent by the end of this year – which would mean a five to seven-point jump.
To get there, based on current group revenue, the division would have to grow its sales by as mush as TT$180 million, and possibly more were Bryden to improve on its overall sales as a group this year.
“Right now, the pharmacy side of the business is about 13 per cent of total revenue. We want to grow that to about 18 or 20 per cent by the end of the financial year,” Pandohie told the Financial Gleaner.
Pandohie acknowledges that the growth target for the pharmacy division is a tall task, but said, now that the business has been streamlined, efforts will be concentrated on the pharmacy side to extract more value.
Pandohie, who is also the CEO of Seprod Group, says the Jamaican conglomerate’s pharma business as a whole is splintered, which effectively adds to costs and dampens profits. The unit needs to scale to improve its financial performance, he noted.
Seprod operates Facey Pharmaceutical while A.S. Bryden’s member company Bryden pi runs a separate pharmaceutical division.
Seprod has owned A.S. Bryden and its group of companies for less than two years, since June 2022. The two companies have been amalgamated but new synergies are under consideration, including in their pharma operations.
“We’re now well on the way to creating a regional structure and, while I do not want to say much more at this time, what I can say is that we are onboarding the necessary talent and we are reimagining our relationships with our suppliers, who are just as excited with what we’re doing,” Pandohie said of the new moves.
The company is aiming for a more efficient approach to drug procurement and distribution.
It involves strategising around overcoming limitations, such as ‘minimum order quantities’, for example, a practice that has seen hospitals dumping unused drugs that have aged out.
Minimum order quantities are said to be the bane of small island developing states’ pharma markets. It effectively means that, in placing an order for a given drug, the minimum amount that can be ordered is often multiples of what a health authority in a particular territory needs.
“Imagine the possibilities if we had a regional approach to ordering drugs. I could easily order in sufficient quantities and distribute to the region in quantities that would make sense for them, and so there would be less dumping,” Pandohie said.
However, he declined to extrapolate further on how Seprod is tackling the issue. What Seprod and A.S. Bryden are looking at is a pharmacy regime that would save money for taxpayers and lessen the cost of healthcare in the region, he asserted.
For the financial year ended December 2023, healthcare was number three of the four divisions making up the A.S. Bryden Group. Consumer goods contributed revenue of nearly TT$1.72 billion; hardware and housewares, TT$198.5 million; healthcare, TT$327 million; and industrial equipment and lubricants, TT$363 million.
Total group revenue climbed from TT$1.25 billion to TT$2.56 billion. However, the comparative period covered only seven months for Bryden, which began operating as a ‘new’ amalgamated company at its takeover by Seprod in mid-2022. Bryden’s history dates back to 1898 as a Barbadian company, and 1923 when it set up operations in Trinidad.
Pandohie says, with neighbouring Guyana currently building seven hospitals, there are real possibilities for growth at Bryden pi.
“There will be growth from simple expansion of the pie. There will also be growth from dealing with our principals and suppliers in a different way. For me, that will be the strongest growth area for us in the short-to-medium term,” he said.
As for the consumer goods division, which is the cash cow for the group, Pandohie says efforts will be concentrated on working down the inventory levels, which had been bulked up in response to the COVID-19 pandemic.
“Now that we’ve seen the back of the pandemic, we can know look where we had to bulk up inventory to as much as four to five months of supplies. We can now bring it down to about two months of supplies, like it was before the pandemic, making it more manageable,” the chief executive said.
Working down the inventory will involve some amount of “margin pressure” from destocking and possibly discounting some goods. As such, Pandohie does not expect Bryden’s top line to grow very much this year. However, efforts will be concentrated on preserving the company’s gross margin, so that it flows to the bottom line.
“We ideally want to grow it to about 30 per cent but, for the time being, we will be satisfied with 200 basis points, which would take us to about 28 per cent,” Pandohie said.
Last year, Bryden made TT$162 million in profit, up from TT$62 million. Profit for shareholders was nearly TT$129 million, compared to TT$65 million in the previous period.
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