Hindustan Biosynth to acquire Hind Pharma

Company to focus on herbal products.

Prior to 2005, Vadodara-based Hindustan Biosynth was considered one of the top five players in Gujarat in pharmaceutical formulations.

However, in a clear indication of where its focus will lie in the coming years, the company will soon take over its group firm Hindustan Pharmaceuticals and utilise its manufacturing facilities to produce herbal products.

Currently 75 per cent of the company's revenues come from pharmaceutical formulations, which has been its core business since inception. But now, the company is making a major shift towards herbal products.

"Between January 2005 and 2008, we have lost a high number of clients in the pharma space to companies operating in the excise-free zone. By making an outright purchase of Hindustan Pharmaceuticals, we are planning to pursue herbal essentials for the export markets," said KS Chhabra, managing director, Hindustan Biosynth.

Herbal essentials contribute around 25 per cent to the company's revenues at present and is expected to go up significantly after the buyout, which is likely to take place in the next fiscal. Hindustan Pharmaceuticals' manufacturing facility is located near Vadodara.

Following the take-over, the manufacturing capacity for herbal products would go up by nearly 75 per cent. While Hindustan Pharmaceuticals' worth has not been disclosed, the management is looking at funding the take-over through commercial banks. It is also keeping the private equity option open and is in talks with a couple of private equity players.

The company is looking at a growth of 25 -30 per cent in the herbal essentials business this year while working on becoming the number two player in herbal essentials in India in next few years.

The manufacturing focus in the herbal essentials segment will lie on lifestyle diseases like diabetes and cardiovascular problems.

Products like gel and oil for arthritis, cholesterol, digestion and liver capsules are already available in the Commonwealth of Independent States (CIS) in a small way and will be exported to six countries.

"Herbal products are catching on in a big way in the CIS countries. It is increasingly being used for both preventive therapies and to treat sickness abroad which we will look to tap," added Chhabra.