Hitech Group to foray into pharmaceutical sector

As part of its diversification plan, Chandigarh-based Hitech Group, involved in agro and meat processing, computer gaming, and livestock genetics, is foraying into the pharmaceutical sector.

The Group will be investing $100-110 million in three years, in three phases, in setting up an export- oriented unit (EoU) in Derabassi (Punjab), with the first phase likely to attract an investment of $12 million.

For the purpose, the group has floated DB Bio-Pharma Private Ltd, which will be set up in Derabassi, about 30 km from Chandigarh.

The new facility will be spread over 14 acres. The laboratories will be housed in a state-of-the-art building complex in 50,000 square feet area constructed in compliance with the US standards.

Speaking to Business Standard, Hitech Group Chairman A S Bindra said: "The new company will be a joint venture entity. We have short listed two companies, Amira Pharma, Germany and Bio-Vosonoe, France."

In the first and second phases, the company will infuse $12 million and $25 million, respectively. It is expected that all the three phases will be completed by 2009-10. He added the first phase would be completed within 18 months.

As far the funding part is concerned, it will be through internal accruals, joint venture funds through equity and also via buyers' finance.

After the completion of the first phase, the company is expecting a turnover of about $50 million in the first financial year of operation, and $80-100 million after the completion of the second phase.

Commenting on products, he said: "We will produce medicines for human and veterinary sciences. It will be a biopharmaceutical company focused on providing highly efficient technology, products and services to the pharmaceutical and biotechnology industries for the rapid and cost-effective discovery and development of drugs."

"We are also developing a substitute of gelatin, which is used in the manufacture of capsule caps. The new substitute will totally be vegetarian-based and will be called bio-caps."

The company is planning to produce 25-30 million bio-caps per annum, with the operation of the unit. Also, the company will produce high-quality APIs (Active Pharmaceuticals Ingredients) for the clients.

He further added the company would focus on the discovery and development of safer and more effective drugs for the treatment of cancer, diabetes, obesity, cardiovascular and central nervous system diseases.