Pharma Is Helping Us See the Light at the End of the COVID-19 Tunnel
Now that vaccines are a reality, the next challenge for governments and the private sector worldwide and in Latin America and the Caribbean (LAC) is to deploy massive vaccination campaigns. However, we cannot ignore the fact that we need to increase our support to the pharmaceutical sector, which is ultimately the one showing us the light at the end of the tunnel.
Everyone's priority is to reignite the economy. The International Monetary Fund recently forecast that the Latin American gross domestic product would bounce back this year by 4.1% after a 7.4% contraction in 2020, much bigger that the one endured in 1914 and 1930 when the regional economy shrank by about 5%. This can only come true if we can create the jobs people in the region are looking forward to, around touristic visits, meals at restaurants, in-person gatherings and many other activities we have been “temporarily” deprived of for a year.
At IDB Invest, we want to keep adding and contributing to the development of LAC, with the pharmaceutical sector being one of the six main industries in our Manufacturing unit for some time now. Even though we have always considered the sector as strategic, the last twelve months have highlighted its importance all over the world.
This high priority is due to several factors: innovation, technology, regional integration, knowledge creation, employment, productive investments, supply chains, including many micro, small, and medium-sized enterprises (MSMEs), and the improvement it creates on the quality of life.
Two recent examples of our support to the pharmaceutical sector are the transactions we closed with Genomma Lab Internacional S.A.B. de C.V. (GLI) in Mexico and Procaps S.A.S. in Colombia.
The former, with GLI, involved financing their first production plant in Mexico, one of the most modern plants in LAC, for manufacturing personal care products and prescription drugs. Take a look at this video: it will amaze you as much as it did me. The plant will dispatch GLI’s products to over 20 countries in the region. And, for those goods to be delivered, GLI has a vast network of suppliers. Many of them are MSMEs, who we support by getting liquidity in very favorable conditions by means of a reverse factoring solution.
The second transaction involved financing for Procaps S.A.S. The project supports the expansion of this company dedicated to developing, producing and selling pharmaceutical products and avant-garde technology for drug supplies. The loan will help to properly fund the long-term cash cycles, which are very typical of the industry.
This will relieve short-term pressure and will contribute additional resources for further R&D and capital investments, the latter both for regulatory and expansion purposes. Just like GLI, Procaps exports most of its products to over 50 countries in all five continents.
Moreover, it is worth mentioning that both transactions are aligned with IDB Group’s Vision 2025, which is mainly based on regional integration, innovation and MSME development.
Our involvement with the sector does not end there: we are advanced in our conversations with several laboratories in the region in order to find ways to support their growth plans and, therefore, continue to assist in the development of LAC. We’ll keep you posted.