Remdal Company

NELSONBRITE NIG LTD.

Introduction

Nelsonbrite Nigeria Limited is a pharmaceutical company that distributes pharmaceutical products for multinational companies in Nigeria. The company was registered with the Nigerian government in the year 1984. At that time the chairman, Chief Solomon, just retired from a pharmaceutical company as a National Sales Manager.

In 2000 the son (David) of the chairman graduated from the university as a pharmacist and joined the company as one of its directors.

Pharmaceutical Market in Nigeria

There are 3 market hubs in Nigeria: Idumota, Onitsha and Kano markets. The Idumota market controls about 45% of the pharmaceutical industry and this is due to the 2 ports - Apapa and Tincan, located about 50km from its location. In addition, majority of the manufacturing companies have their manufacturing plants within the Lagos metropolis. Onitsha and Kano collectively control 40% (30% and 10% respectively); while other smaller markets jostle for the remaining share of the industry.

Business Development

There are however, limitations of being a distributor. Constant price wars and reducing margins from having multiple distributors within the same market have led to increase costs and lower margins. David thought about the present situation and explored expansion possibilities. He gathered information from various sources (NAFDAC, Ministry of Health, WHO, World Bank) and came to the conclusion that he had 3 options open to him:

I. Manufacture the drugs locally

II. Import the drugs from outside the country

III. Contract manufacturing of the drugs to multinationals

Manufacturing

David thought he should go into manufacturing primarily because the company had acquired a 10 acre land along the Lagos – Ibadan express way 2 years ago. He invited a consultant from India (Mr. Arjun) to give an estimate of the cost implication of setting up the plant in this location. Mr. Arjun highlighted lines in which they can start manufacturing:-

I....