An Analysis Of Factors Affecting Sustainable Growth Of Local Pharmaceutical Manufacturing Companies In Kenya

ABSTRACT

The purpose of the study was to analyze the factors affecting sustainable growth of local pharmaceutical manufacturing companies by determining and establishing their influence on sustainable growth of these firms in Kenya. The review of related literature identified these factors as competition, government regulations, international regulations and the cost of production. The study adopted a cross sectional research design and targeted 32 local firms registered with the Pharmacy Poisons Board in 2016. Data was collected using a questionnaire and analyzed using descriptive and inferential statistics. Pearson’s correlation and regression analysis were used to test the influence of predictor variables on the dependent variable. We found that there has been increase in the number of employees in the firms since their inception (median of 6-10) to date (median 41-50) signifying growth. The study established that competition in the sector had positive effects on the growth of the local pharmaceutical manufacturers. Government regulations also favoured growth of the firms. This could be attributed to government policies aimed at enhancing growth in the sector. The study concludes that the international regulations have benefited the local firms even though they seem to favour multinationals. Further, the study concludes that the cost of production in Kenya, largely driven by cost of raw materials, energy, labour, machinery and taxes had a significant negative influence on the growth of these firms. The study recommends that government encourages competition in the sector to enhancing quality and promote use of competitive strategies thus facilitating growth. The government should introduce more policies and regulations that encourage the growth in the sector. The local pharmaceutical manufacturers should strive to adhere to international regulations inorder to access international markets for their products. Lastly government should review sector specific tariffs, lower the cost of energy, promote labour environment that responds to sustainable growth needs of local pharmaceutical manufacturers. The study was limited to the extent that it excluded the role of management and corporate culture in influencing sustainable growth of the firms.