PC Pharma Limited - Colombo Stock Exchange

Risk associated with the Manufacturing Process
Given the nature of the products there are several manufacturing related risks can be
identified,
The manufacturing of pharmaceuticals is subject to a very strict process which consists of
strict regulations on the quality of raw material supplied, quality control through the
formulation process, and packaging of the finished products as well as the distribution
process. The process and standards will vary according to the product hence careful
attention should be paid to each product at each stage any mishap in the process would
result in a low quality products this will be harmful to the patient and have an adverse
impact on the company.
Scrap disposal will be one of the biggest issues in maintaining a pharmaceutical
manufacturing plant as each item of waste will have to be disposed in such a way so that it
won’t be harmful to the environment or the people hence the process of disposing will be
costly. Another potential risk is the risk of recalls, if a product is not up to the required
quality standards the company will have to recall the products from the distributors and
this will have a severe impact on the company’s financials.
Given the nature of production there will be strict regulations and quality tests imposed by
the government in order to ensure the quality of the products, the company will be
required to obtain licenses from the required authorities and if the company fails to
maintain the quality standards then they will be exposed to the risk of losing the license.
Any of the said risks would have a negative impact on the company’s immediate and longterm
profitability.
30 Introductory Document – PC Pharma Limited