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Beximco Pharmaceuticals secures a €24.9 million loan

By The Economist

Beximco Pharmaceuticals Limited secured a €24.9 million loan from the German bank ODDO BHF SE to expand its production capacity, enhancing its presence in both local and export markets. According to the company, Beximco Pharma and the German bank signed an agreement in February to secure the loan for purchasing machinery and equipment by 31 December. The loan will primarily be used for replacing and maintaining machinery, with a portion allocated for expanding the company's manufacturing facility.



Additionally, Beximco Pharma has received approval from the Bangladesh Investment Development Authority (BIDA) to obtain the foreign loan.  Despite this disclosure, the company declined to make any official comments on the loan agreement. The company also stated that the loan, which will be paid directly to the machinery and equipment suppliers, has an interest rate of 6-month Euribor (Euro Interbank Offered Rate) plus a 1.3% margin. Repayments will be made in half-yearly installments over five years, starting June 2025.The 6-month Euribor interest rate is the rate at which selected European banks lend each other funds denominated in euros for a maturity of six months.

Previously, Beximco Pharma had obtained a €19.05 million loan from the same bank for business expansion, which was fully paid off in January this year. The company has consistently increased its production capacity, including the installation of a third factory, Unit-3, which began operations in 2021 after an investment of over Tk1,000 crore. Additionally, Beximco Pharma acquired the local operations of multinational drug makers Nuvista Pharma and Synovia Pharma, both now operating as its subsidiaries.

An equity note on Beximco Pharma by EBL Securities indicated that the company generates a significant portion of its revenue from domestic drug sales, averaging 90% of total revenue from FY19 to FY23. During this period, the company earned an average of 9.4% of its revenue from exports and 0.2% from contract manufacturing.

The EBL Securities equity note also mentioned that the pharmaceutical industry in Bangladesh is worth Tk31,200 crore as of March 2024, with the top ten pharmaceutical companies holding a 71.6% market share during this period.

Beximco Pharma has consistently ranked third among the top ten pharma companies over the last ten years, holding a 9.6% market share as of March 2024. The company's consolidated net revenue increased by over 13%, reaching Tk3,305 crore in the July-March period of FY24 compared to the same period the previous year. It also recorded a 23% growth in consolidated profit, reaching Tk437 crore during the same time frame compared to the previous year. The company paid a 35% cash dividend to its shareholders for FY23.


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