Ranbaxy Laboratories Ltd, in a bid to move up the value chain, has altered its product mix. During the first six months of its ongoing financial year, the company has not only increased the share of its overseas business in its consolidated global sales, it has also reduced the share of its raw materials business.
Domestic sales dropped from 47 per cent in the six-month period ending June 30, 2000, to 43 per cent in the first half of 2001. Overseas business, which include exports from India as well as the business of its affiliates and joint ventures in 25 countries, went up from 53 per cent to 57 per cent.
"The figure of 57 per cent is an all-time high and has helped the company's bottomline as prices abroad are more attractive," Ranbaxy managing director D S Brar said. Thus, though the company's turnover grew 18.2 per cent during the first half of the current financial year, its operating profit rose 29.4 per cent, profit before tax 35.3 per cent and profit after tax 34.2 per cent.
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The overseas dosage business has been the main contributor to the growth in turnover recorded by Ranbaxy during the first half of the current financial year. While it grew 44 per cent, the domestic business grew by 6 per cent and the overseas raw material business grew by only one per cent. During the period, the share of Ranbaxy's overseas raw material business too has come down from 20 per cent of its global sales in the first half of 2000 to 17 per cent in the first half of the current year.
Overall, the contribution of the raw materials business accounted for 25 per cent of Ranbaxy's global sales. "Earlier, it used to be as high as 32-33 per cent. As the company is preparing to move from being a generic company to a specialty company, it is only natural that it should reduce its dependence on the raw materials business," Ranbaxy executives said.
According to Ranbaxy executives, the company's overseas business is led by the US, which accounts for 42 per cent of the world's pharmaceutical market. The US accounts for 16 per cent of Ranbaxy's turnover and its share is second only to that of India which leads the pack with 30 per cent. "Today, there is no drug store in the US which does not stock a Ranbaxy product," Brar added.