Medtech frets over informal sector threat

RYAN CHIGOCHE

Medtech Holdings has raised concern over the threat posed by the influx of cheap counterfeit products brought into the country by the informal traders.

Company secretary, Muhammed Patel said Medtech said the influx of the counterfeit  products was putting pressure on the consumer staples concern.

He said the informal sector was not affected by policy measures unlike the formal sector.

“The competitiveness of the informal sector is largely unhindered by policy pronouncements resulting in the informal players becoming an increasing threat to the formal economy. Unfortunately, we envisage this trend continuing, resulting in a smaller tax net and increasing pressure on formal businesses,” Patel said.

In its financial results for the full year ended December 31, 2021, turnover for Medtech jumped 68% to ZWL$953m from ZWL$567m in the prior comparable period.

Sales volumes  increased by 110%.

However, the company bemoaned the delays in the payment of successful auction bids which hampered operations and resulted in increased working capital demands during the period.

At the year-end successful auction bids to the value of US$465 000 were unpaid, Medtech said.

Also weighing the company down was the legacy debts amounting to ZAR17.5m .

Patel said the legacy debt was affecting the timeous supply of goods.

In the outlook, the company is expecting positive policy pronouncements guided by the recommendations of captains of industry so as to solve the problems affecting the economy.

“Should the various recommendations by organisations such as the Zimbabwe National Chamber of Commerce or the Confederation of Zimbabwean Industries be implemented then we anticipate positive developments thereafter,’’ Patel said.

As a going concern, Medtech will continue to focus on looking for good opportunities, concluding private equity transactions and assisting underlying portfolio companies in achieving their goals, Patel said.