Foreign exchange shortage continues to hit pharma sector

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The current economic crises has taken a hard hit on the local pharmaceutical manufacturing industry, stated Lina Manufacturing CEO Rohan Wetthasingha.

“We are finding it difficult to import raw materials, due to the shortage of foreign exchange in  Banks. Our parent company is in a different commodity export business. We do get some US dollars from our parent company, however it is not sufficient for our raw material import requirement,” stated Wetthasingha.

“We manufacture blood pressure tablets, dry powder inhaler for Asthma patients and Metered Dose inhalers. The gases, valves for manufacturing these products have to be imported from United Kingdom,” Wetthasingha said.

He added that Lina Manufacturing has applied for imports through the Indian credit line, and has been waiting for a response from the Government.

Another issue, he cites is the regular power cuts. “In this industry, certain manufacturing processes take long hours and power cuts are disrupting production. We are unable to use generators too, due to the shortage of diesel.”

He added, “We supply to the Medical Supplies Division of Ministry of Health according to the buyback agreement. The pricing for these products was fixed when the foreign exchange rate was at Rs 160 per USD or lower than that. Now the exchange rates is around Rs 360. After, negotiations, the prices were increased by 20%. However, the Sri Lanka Pharmaceutical Manufacturers’ Association (SLPMA) has requested for another 60% increase. Even if increased by 60%, it still may not be enough with the cost of diesel, as we need to use generators due to regular power cuts.

 “As per the buyback agreement, we are supposed to be paid in 60 days, but payments now are delayed by 120 days or more. As a result of all these issues, we at Lina manufacturing have temporarily stopped supplying to the MSD.

“Currently as an alternative, we are doing contract manufacturing for an MNC company. The MNC company’s parent company based in Indonesia provides us the raw material, for which we are supposed to pay in US dollars. Now we are using their credit for around 300 days, as we are unable to find USD,”  Wetthasingha said.

Meanwhile, pharmaceutical importers also continue to face serious challenges in importing due to foreign exchange shortages. Prime Minister Ranil Wickremesinghe has appointed UNP Deputy Leader Ruwan Wijewardene to look into the shortage of medicine. Last week, members of the Sri Lanka Chamber of Pharmaceutical Industry (SLCPI) met Wijewardena and explained their concerns. A member of SLCPI noted that around USD 30 Million per month was needed for essential pharmaceutical imports.

By Rajiesh Seetharam