Intravenous Infusion to expand production capacity
Intravenous Infusion, the single largest producer and supplier of intravenous fluids (IV fluids), is set to raise GH¢5.4 million through private placement to enable it to expand its production capacity.
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The expansion is to help increase the production capacity of IV fluids by the company to meet the demands of health facilities in Ghana and the West African sub-region.
The Managing Director of Intravenous Infusion Limited, Mr David Klutse, said the additional funds were to complement the GH¢6.6 million raised on the Ghana Alternative Market (GAX) of the Ghana Stock Exchange (GSE) after listing in 2015.
“We came to the market to raise a certain amount of money, but we could not raise all in the first Initial Public Offer (IPO). We decided to use the funds realised to increase the filling capacity of our plant to produce 15 million units of output (IV Fluids) in a year.”
“We have tried to do a private placement to complement the original work and to receive the funds to be able to complete the expansion work in the factory. We are going to expand and increase capacity through the addition of a modern plant, nine months after funding through the private placement offer,” he said at the Facts Behind The Figures session of the GSE in Accra.
The excess funds would also to help remove constraints along the production lines of the company to enable it to take advantage of both existing and new markets.
“It will increase the capacity to enable us to take advantage of the local market, move to the export market and to eliminate all forms of constraints to optimise plant capacity to increase the utilisation from 40 per cent to 75 per cent,” he said.
Impact of IPO
The company listed and began trading on the GAX in December 2015, becoming the fourth equity to list on GAX. The listing followed the completion of an IPO which commenced in October to raise about GH¢12 million to expand its operations.
Highlighting the impact of listing on the GAX on the company’s operations in 2016, Mr Klutse said the company recorded an increased installed capacity of filling plant to 15 million units, reduced exchange losses by more than 200 per cent in 2016 while finance costs declined by 25 per cent from the previous year.
He said sales volumes increased by 7.5 per cent and the company’s profitability also increased by more than 200 per cent.
Outlook
The company, Mr Klutse explained, had progressed in the right direction, and with a strong balance sheet, it was hoping to continue the steady growth.
He said the target was to dominate IV fluids and small volume injectable market, which the company will do by investing in new technologies to be able to increase production in that market segment.
“We are going to launch new products under the small volume injectable category to increase their contribution to 40 per cent of total revenue,” he said.
He further explained that the company would seek to increase its market share in Ghana, re-establish presence in Cote d’Ivoire, Burkina Faso, Togo, Benin and Nigeria to contribute about 10 per cent of its turnover.
The company currently has distribution depots in Takoradi, Accra, Tamale and Kumasi. It also extends distribution to Cote d’Ivoire.