Nigeria, with a population of over 170 million, holds the promise of a massive pharmaceutical business due to a potentially large local demand. The market is dynamic, growing and estimated to be around $1.6bn or N368bn.
However, there is a major challenge in drug distribution which had remained unorganised and a breeding spot for all forms of unethical practices. The federal government has taken some measures, including the approval of the recently formulated New Drug Distribution Guidelines (NDDGs) to correct the lapses, protect the health of the consuming public and make pharmaceutical services more responsive to the need of the citizenry.
There is a huge business opportunity in drug distribution in Nigeria and potential investors are being called upon to take advantage of this opportunity. This is where Ultra Logistics Company Limited comes in.
Frequently Asked Questions
What is Ultra Logistics Company Limited?
Ultra Logistics Company Limited (ULCO) is a limited liability company established to provide an opportunity for investors and practitioners to be part of the positive changes that will reposition and maximise the growing Nigerian pharmaceutical industry. It will operate as a commercial enterprise with an underpinning social enterprise ethos that grows the investment of its shareholders while protecting the public interest in the distribution of safe, effective and affordable drugs.
What is the rationale for the formation of UCLO?
The Pharmaceutical Society of Nigeria (PSN), as a major stakeholder, set up a committee to work on the implementation of the NDDGs. The committee, as part of its report, recommended the setting up of company that will not only stabilise the system in the short run but also help to protect the public and vulnerable operators in the industry. The company was also conceived to promote indigenous entrepreneurship by offering all interested Nigerians an investment opportunity.
Is this company an arm of the PSN?
No. ULCO is a registered company with no statutory obligations to (or ties with) the PSN. The PSN is simply a promoter and shareholder of ULCO. All the activities of the organisation are being managed by a team of accomplished individuals led by a managing director. The finances of the organisation are not in any way tied to the apron strings of the PSN.
There were ventures promoted by the PSN in the past which did not succeed, why should I invest in this new venture?
As stated earlier, this venture (ULCO) is an independent organisation which will be run in line with the best business practices. The call for investment is not a call for annual dues, levy or any sort of contributions. It is a call for discerning individuals or groups to engage in a business for a future return on their investment. While we can cite some past failures, there are also success stories in our immediate environment and in the world that can inspire us to action. This venture has been carefully packaged for success and we can only be limited by our imagination.
What is the status of Ultra Logistics Company Limited now?
ULCO has been registered with the Corporate Affairs Commission (CAC). It has accounts with Diamond Bank Plc and Sterling Bank Plc. The placement memorandum was formally launched by an Icon of Pharmacy, Dr (Mrs) Dere Awosika on Thursday, 14 May, 2015. The response has been very impressive.
We are currently negotiating with banks for Equity and Debt financing options, and also with service providers on logistics, IT, etc. The company’s website has not been finalised but there are links that can take interested persons to the core essentials of the business.
If ULCO has been registered, who are the directors and how will the management team be chosen?
ULCO, as of today, has four nominal directors, each holding a nominal 25 per cent share of the company. They are:
- Pharm (Dr) Lolu Ojo;
- Pharm Lekan Asuni;
- Pharm Victor Okwuosa; and
- Pharm Abbas Sambo.
The interim management is completed with the addition of Mrs Bukky George, founder/CEO of HealthPlus Limited. The shareholders will appoint the substantive directors during the completion meeting when the placement register must have been closed.
Concerning operations management, we are working on filling the workforce gaps as contained in the business plan. The final list will be approved by the Directors as elected by the shareholders.
In summary, what are the key elements of the placement memorandum?
- The total, capital requirement is about N2.3billion with a critical threshold of N400-500 million.
- A total of 92,000,000 shares are on offer, at the rate of N25/share. The minimum level of investment is N100,000 or 4,000 shares. Application forms are available online and money can be paid directly to any of these bank accounts:
- Diamond BANK: 0060361322
- Sterling BANK: 0031278879
iii. The deadline, initially slated for 30 June, 2015, has been extended to 31 August, 2015.
- The cost outlay and the three-year revenue projections are provided in an easy-to-read format. We are targeting one percent of the total market in the first year of operation and our profit expectations are very, very conservative. Despite this conservative estimate, a breakeven is expected in the second year of operation.
What is the guarantee of success of this venture and when should I expect dividends?
- There are no absolute guarantees of success in a business venture of this nature. We are aware of the risks and have lined up measures to minimise the impact. Our inclusiveness strategy is a success factor, in addition to our realistic or modest expectations, the environmental allure and the passion of the promoters.
- Dividend payment will depend on the actual business success and the culture that the organisation will adopt as it grows. Dividend payment is not the only expected return on your investment. Your fund will grow and you can take advantage of the capital appreciation.
What is the status of the NDDGs?
There are still on-going discussions among the various stakeholders on the exact manner of operation of the guidelines. The FG has a pronouncement which is yet to be effected. It is important that everyone is carried along in the implementation.
Is the operation of ULCO tied to the implementation of the NDDGs?
No. The birth of ULCO was based on circumstances that are related to the discussion of the NDDGs. However, there are enough existing business reasons for ULCO to operate with or without the NDDGs.
Our projections have already taken into account that the implementation of the NDDGs may or may not be delayed.
Will investment in UCLO be restricted to pharmacists?
- Pharmacists and pharmaceutical institutions are the primary but not the only targets of our investment drive. We are reaching out to the public to join hands with us in making our goal a reality. Already, we are in touch with investment experts to take over the second phase of the investment campaign.
What else do I need to know about UCLO?
- If you are yet to fill your form and make payment, please do so now. If you have made payment but wish to do more, please go ahead now. Do not wait till the new deadline of 31 August will close in on you.
- ULCO is an idea whose time has come. Nigeria cannot continue to be enmeshed in the chaotic system that is the order of the day. We have talked and talked about it to no end. This is the time to create solutions and you should be part of it.
iii. The company will be run by a competent management team under the supervision of a Board of Directors whose membership will reflect the shareholding structure. You can get a seat on the Board, depending on your level of participation or shareholding.
- The company will be run based on the world best business practices, ensuring there is a commensurate return to the investors. It will also protect the interest of Pharmacy and the general public in the drug distribution system.
- We are committed to transparency and integrity in the deployment of the resources you putting in our care.
Dr. Lolu Ojo, BPharm, MBA, PharmD, FPCpharm, FPSN, FNAPharm, DFPEFON
Ag. Managing Director
ULTRA LOGISTICS COMPANY LIMITED