Kedia Biotech to buy Rs 5cr facility in Kochi

Kedia Biotech, a wholly-owned biotech and life sciences arm of the Hyderabad-based Kedia Group, is planning to acquire a herbal oil extraction and capsule manufacturing plant in Kochi at an estimated investment of Rs 4.85 crore. At present, the Rs 165-crore group is in talks with Kochi-based ANE Limited for the acquisition.

The move is a part of the company's plans to expand its herbal and therapeutic dietary supplements' business to the African markets.

Speaking to Business Standard, Ashok Kumar Kedia, chief executive officer of Kedia Group, said: "Buoyed by the good response for our recently-launched therapeutic dietary supplements in the Indian market, we have decided to expand our horizons to other countries. As part of this strategy, we are planning to acquire an oil extraction and capsule manufacturing plant from our contract-manufacturer, ANE Limited. We are currently in talks with the Kochi firm, and we expect the deal to be completed by the second week of December. The acquisition of the plant will involve an investment of close to Rs 5 crore."

The research and development wing of the group's recently-floated Kedia Biotech has developed six herbal dietary supplement formulations - Green Tea Extracts (organic green tea polyphenois), K-Curcuminoids (natural curcumin), K-LoSterol (Reducerol), K-Slim U (hydroxy citric acid isolated from Garcinia Cambogia fruits), Veg-Omega3 and K-Artho Relief (turmeric and boswellia extract).

The Rs 20-crore ANE Limited at present manufactures Kedia Biotech's dietary supplement capsules on a contract-basis at its Kochi facility while the latter is marketing the products through its own dealer-network.

The acquisition of ANE Limited's manufacturing plant at Kochi would see Kedia Biotech's entry into the African markets from the next fiscal.

"Once the acquisition of the plant is completed, we plan to foray into the African markets. We have already received orders worth Rs 3 crore from Botswana and South Africa. We have charted out a growth path and as a part of it, we also plan to enter the European and the US markets in a phased manner. We expect a turnover of Rs 8 crore from our dietary supplements' business next fiscal," Kedia said.

"The Kochi facility currently has a capacity of 15 lakh capsules a month. We plan to increase the capacity to 50 lakh capsules a month. We also plan to ramp up our dealer-network by adding 100 more dealers to the existing 48 by the end of December 2005," he added. Kedia Group expects to close the current fiscal with a turnover of Rs 190 crore clocked a turnover of Rs 165 crore last fiscal.