Online Reporter
Michael Tome
Business Reporter
VARICHEM Pharmaceuticals’ formation and foundation in the early 1980s is a story of persistence, perseverance and determination.
What started as a lunchtime conversation between workmates at the then-Pfizer grew to become a formidable and one of the biggest pharmaceutical companies in Zimbabwe.
The workmates, who were not in any fancy positions at the company, decided to conquer the seemingly unconquerable.
This unimaginable possibility is now the reality for Mr Tobias Dzangare (Varichem Pharmaceuticals managing director), Mr Celestine Gadzikwa (finance manager) and Mr Glory Zata. Thses were a rare breed of local entrepreneurs.
Mr Dzangare was a pharmacist by training, while Mr Gadzikwa was into finance.
Despite being well remunerated, the entrepreneurial spirit itched in their inner souls, and they had a destiny to fulfil, which was the fire that drove their aspirations to start their own company.
But how and where would they start, given the huge amount of capital required and complications associated with starting a company, let alone a pharmaceutical one?
“Zata and Gadzikwa and I saw that there was an opportunity to go in and make those products,” said Mr Dzangare in an interview.
“We decided we could work out and find a way and make pharmaceutical products in Zimbabwe, but we all knew that pharmaceutical products were not an easy process; it was a complex process.”
Nonetheless, the journey started with a decision to register a simple and less capital-intensive business; making brake fluid.
Mr Dzangare, the pharmacist, had learnt about pharmaceutical production at Pfizer.
Once convinced they could do it as well, despite their humble backgrounds, this trio decided to resign from Pfizer.
“So, we decided to start with a simple company that would generate income so that we could start a pharmaceutical company,” he said.
“We decided to raise funds for that simple project, and that is the period we decided to step away from our secure employment at Pfizer.”
The start was not a stroll in the park for these men. To get started, their business required Z$24 000, a hefty amount a few could afford then. Determined to realise their dream, they decided to rope in a colleague, Mr John Mugodhi (now late), who chipped in with Z$18 000.
“We decided to rope in a gentleman called John Mugodhi, who came in with a financial injection,” said Mr Dzangare.
“He had supermarkets and nightclubs in Chitungwiza and Budiriro. We then sold the little properties we had to raise the remaining Z$6 000.”
Mr Gadzikwa had to part ways with some of his prized belongings.
“We did not have much money because we were simple employees,” he said.
“I sold some of my belongings, which included golf clubs and a fridge. I do not know where Tobias got his money, but it came in a Bata shoe cardboard box.”
Still, this was only the beginning of their woes. Banks would not allow them to deposit the money for safekeeping due to widespread racial stereotypes; many banks were managed by whites then. But their luck arrived when they stumbled upon a man who managed a branch of one of the banks.
“When we were about to deposit that money, the banks refused to accept our money; they even refused to open an account for us,” said Mr Dzangare.
“We were shocked, and it took us another two to three months to open a bank account. We only managed to open an account after finding a branch that was headed by a fellow black man in Newlands.”
This laid the foundation for the birth of Varichem Laboratories in 1985.
After making samples and approval to make brake fluid, they hit the ground running.
Acceptance of the brake fluid product on the market was not easy; a former employee had spread false information that they were selling a fake product.
“Companies were not interested in our product, despite the shortage of the product on the market those days,” said Mr Dzangare.
“Our former employer had gone around telling people that if you buy the product from a black-owned company, your brakes were likely to fail and you would be involved in accidents.”
It was only after assistance from Mr Gadzikwa’s former workmate (not at Pfizer), Mr Mike Boitcluck, who chipped in and assisted with marketing, that the company started to blossom.
“Now that we had the product, the market started doubting our product, considering that we were simple beings from black home backgrounds,” said Mr Gadzikwa.
“Mike managed to sell our first product worth Z$21 000 at Caltex, and there were no issues. This triggered other companies to send their orders, and we started supplying the product.”
From then on, they started to make progressive steps towards establishing their aspired pharmaceutical business. This was a complex process that required premises, needed the company to be registered, inspected and the products to be evaluated by regulatory authorities like the Medicines Control Authority of Zimbabwe (MCAZ).
“It was tough because for pharmaceuticals, you develop a product and get it registered, but it can take 18 months to three years before you can have the product approved and place it on the market, which means you would need to have a lot of funding because you will only start generating money after three years,” said Mr Dzangare.
The breakthrough came in 1988, when Varichem made and registered Prazosin, its first pharmaceutical product. Again, that same hurdle, which had been encountered in the brake fluid business, followed. Market acceptance of the product was difficult.
“When it came out, most of the wholesalers and pharmacists were not interested in our product, given the prejudice from our former employer,” said Mr Dzangare.
“We found it difficult to sell our product, and that was the make-or-break point for us, because the amount of our product that was rejected was too huge; we had not even thought about it. We thought everything would just go smoothly.”
The firm’s breakthrough came in 1991 when it secured a major contract through a competitive tender process.
This significant success marked a turning point for the company, bringing in new opportunities, revenue and recognition.
“Our real breakthrough came in 1991 when we won a large tender to supply National Medical Stores of Zimbabwe,” said Mr Dzangare. “It gave us a strong footing and we decided to build our first bigger and better plant.”
Gradually, the company gained traction, and more people began to appreciate it. Its operations spread to the manufacture of many other pharmaceutical products, research and development, oral solid dosage, liquids, creams and ointments, granules for oral suspension, quality assurance, product testing and quality control.
The company has since grown to include Greenwood Wholesalers and Pharmacies; Prochem Pvt Ltd, which manufactures body creams; and Variplastics, a packaging company.
Varichem Pharmaceuticals now has an extensive distribution network supplying products to a wide range of customers that include pharmaceutical wholesalers, retail pharmacies, dispensing doctors and industry clinics, aid organisations, corporates, central Government medical stores, Zimbabweans in the diaspora, private hospitals and clinics, medical aid societies, local government hospitals and clinics.
Besides meeting local demand, the company has established good business relationships with regional buyers. It now exports its generic pharmaceuticals to Malawi, Botswana, South Africa, Namibia, Lesotho and Swaziland.
From a humble export value, the company’s shipments have increased extensively over the past five years, which indicates growing confidence of regional customers in its products.
Varichem Pharmaceuticals became the third company in sub-Saharan Africa to achieve World Health Organisation (WHO) pre-qualification for a medicinal product.
