MedFirst Healthcare Services Inc (杏一), which operates healthcare stores with medical consultancy services, on Thursday announced plans to spend NT$446 million (US$13.86 million) to build an automated warehouse and logistics center to improve the company’s efficiency.
“Our current warehouse and logistics center was hastily built, and its capacity will not sustain long-term expansion as we increase our market coverage,” MedFirst president Jimmy Tsai (蔡德忠) told an investors’ conference in Taipei.
The company has opened 17 pharmacies this year, increasing its total to 205 branches, while inking partnership deals with 21 pharmacies operated by its peer Dr Med (達康美得), Tsai said.
MedFirst specializes in selling products and equipment for the care of older people at stores near major hospitals.
The company has been expanding in the prescription medicine market through collaborations with other community-focused pharmacies, Tsai said.
However, the success of such new stores has been hit-or-miss, Tsai said, adding that the company would continue to assess its location strategy and gauge the level of training required for staff at each pharmacy.
Pharmacies differ from other retail businesses as their storefronts are designed to display as many different types of products as possible, which limits the amount of inventory that can be held at each location, he said.
“A product must be on display at all times, even if only a few units are sold each month,” Tsai said, adding that a new logistics center is needed to maintain service quality, lower costs and support long-term growth.
The facility is to be funded by the issuance of new shares and convertible bonds, he said.
In the first three quarters of this year, MedFirst reported that sales rose 6.8 percent annually to NT$3.02 billion, while pre-tax net income fell 17 percent from the same period last year to NT$93.42 million, or NT$3.03 per share, which it attributed to higher costs caused by its rapid expansion.
FirstMed also reported that losses in China narrowed from 1.68 million yuan (US$241,741) last year to 121,000 yuan in the nine-month period, with sales rising from 17.66 million yuan to 22.52 million yuan.
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