CABINET has tasked the ministry of Industry and Commerce to craft a recovery plan for financially beleaguered pharmaceutical company Caps Holdings as Zimbabwe continues to rely on imported drugs.
Presenting oral evidence before a Parliamentary Portfolio Committee on Industry and Commerce on Wednesday, Industry and Commerce permanent secretary Abigail Shonhiwa said negotiations were underway to resuscitate the company.
Shonhiwa said her ministry had been mandated to tackle 14 critical areas including bailing the erstwhile pharmaceutical giant under the Zimbabwe Agenda for Sustainable Social Economic Transformation (Zim Asset).
Zim Asset is a medium term economic blueprint which seeks to turn around the economy.
“Government resolved that Industrial Development Corporation resuscitate it to ensure supply of essential drugs. Negotiations are ongoing,” Shonhiwa said.
At its peak, Caps manufactured 75% of essential drugs in the country.
The development could be a lifeline for the pharmaceutical firm whose properties may soon be sold to pay off debts.
Last month, the High Court ordered the sale of Caps Holdings (Ltd) head office through a private treaty nearly two months after an initial disposal of the property was reversed following a $1,5 million bid by Chinese investors.
Caps Holdings owes CBZ Bank $6,5 million.
Early this year, Mtandah described earlier attempts to auction the property as illegal, saying he had agreed on a repayment plan with CBZ and FBC Bank, which Caps owes in excess of $4 million.
He also argued that government, through Natpharm, had undertaken to settle funds owed to Caps, which would in turn help the company pay its creditors.
In June, the Caps Holdings boss said last year, Cabinet made a decision to take over the company’s debts as a way of rescuing the erstwhile pharmaceutical giant.
In its submissions to the same committee, the Confederation of Zimbabwe Industries proposed to government a raft of measures to stimulate the struggling manufacturing sector.
Capacity utilisation for the sector this year declined to 39% from 44% in 2012 with the pharmaceutical firm being one of the most affected by the underperformance of the economy.