Hester Pharma draws up massive expansion plan

To foray into cattle, sheep vaccines next year

Ahmedabad-based Hester Pharmaceuticals Ltd, a leading poultry vaccine manufacturer, has drawn up a massive expansion plan. The plan envisages a 300 per cent capacity expansion of its manufacturing plant at Kadi in Mehsana district.

The plant at Kadi, set up in 1997, today manufactures 12 live and 28 inactivated poultry vaccines and has a capacity of 120 crore doses.

Under the expansion plan, this capacity will be increased to around 400 crore doses. The plan is likely to be implemented by the last quarter of 2005-06, said Rajiv Gandhi, managing director, Hester Pharmaceuticals Ltd.

The Rs 12-15 crore expansion will be funded majority through debt. The expansion will not dilute the shareholder value, the sources said. Company might also issue right shares to generate funds for the expansion.

"At present, the company is involved in the production of poultry vaccines. Hester will soon branch out to manufacturing cattle and sheep vaccines after the expansion, " Gandhi told Business Standard on Monday.

Hester is among the only three companies that manufacture poultry vaccines in the country. Venkateshwara and Indovax are the other two manufacturers.

Gandhi said that the company will be in a position to drive exports once the capacity is scaled up. "As of today, exports account for just around Rs 1 crore of the total Rs 16.24 crore turnover," he said. But for the moment, the priority will be to meet the Rs 3 crore domestic orders.

The company reported a 111 per cent increase in turnover to Rs 16.24 crore in 2004-05, compared with Rs 7.68 crore last year.

"The company has been growing at over 100 per cent in the past two years. But this year, we expect a turnover of between Rs 23 crore and Rs 25 crore," Gandhi said.

The profit before tax for 2004-05 stood at Rs 6.35 crore, compared with Rs 1.95 crore for the year ended March 31, 2004, a growth of 226 per cent.

The net profit shot up by 269 per cent for the year ended March 31, 2005 at Rs 3.94 crore, compared with Rs 1.07 crore for the year ended March 31, 2004.