When belief in hard work pays

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It was a comfortable job for 56-year-old S P Vasireddi, the chairman and managing director Vimta Labs Limited, in his earlier stint at the Mineral Exploration Department's chemical lab. But then, enjoying comforts without any toil was not the way he wanted to be for the rest of his life.

"We hardly used to have any work. At the most, we used to have work for an hour or two. Then my wife, in 1984, encouraged me to start my own company," he recalls.

With an investment of Rs 2 lakh, an equal investment of Rs 1 lakh each by Vasireddi and his brother-in-law V Harriman, Vimta Labs started operations in a small office in Durgabai Deshmukh colony in Hyderabad. "I was the only person in the lab. Later my wife also helped me in the research. It was only after the first three months that I recruited six people," he says.

The company broke even in the first six months of operations. "The company started out by testing water samples, but slowly we increased our portfolio. In 1987 we were recognised as an environment lab under the Environment Protection Act. During this period, we were also doing tests for the Bureau of Indian Standards," he said.

The company started testing drugs from 1988 onwards but then the existing facility was not sufficient. "In 1989, we purchased a piece of land in Cherllapally Industrial Estate and started constructing a modern facility with an investment of Rs 6 crore here. We moved into the facility in 1992, when it was more or less complete," Vasireddi said.

After shifting to the new facility, the company started expanding its portfolio. "In 1992, we started biological testing that includes micro-biological testing, toxicology, etc and in 1994 we started focusing on quality systems that would then enable us to be a global player," he said.

Just as Vimta Labs was getting set to undertake projects from companies abroad, the markets collapsed, which the company was not prepared to handle. "During this period, we redefined our strategies and slowly picked up our business by 1998," he said.

Today, Vimta is a leading provider of multi-disciplinary contract research and testing services in India. It is gearing up to become a fully integrated contract research organisation (CRO) during the next year.

At present, it is the only listed CRO in the country and the move to become an end-to-end player in the CRO segment is expected to help the company pick up lucrative outsourcing projects. According to estimates, the current market size of contract research services in the country is around Rs 450 crore.

The company is now focusing on providing research in life sciences, proteomics and genomics. "The present facility has cannot be modified to suit the new requirements and so the company is building its new facility for life sciences in Genome Valley with an investment of Rs 40 crore," he said.

The company expects this facility to start operations in a small way by March 2005 and work to the full capacity by July next year.

Vimta had, for the past four years, seen a compounded annual growth rate of 80 per cent. Its revenues were up 81 per cent to Rs 35.11 crore, while the net profit zoomed by 311 per cent to Rs 8.5 crore.

Overseas revenues accounted for 32.64 per cent. Vasireddi said the company was expected to sustain the growth rates for the current fiscal too. In the first quarter ended June 30, 2004, the income rose by 88.5 per cent to Rs 12.82 crore and net profit jumped by 184 per cent to Rs 3.83 crore.

Last fiscal, the overseas orders grew by 215 per cent to Rs 11.46 crore. This year, the overseas revenues would do better and may even account for 40 per cent of the total revenues, Vasireddi said. The company has set an ambitious target to be among the top 10 CROs in the world by 2010.

Vimta Labs has three branch laboratories. It has bio-availability studies and clinical lab facility at Chennai and a clinical lab each at Vijayawada and Visakhapatnam. A clinical reference lab and a pharmacology have been set up at VHS Hospital in Chennai at a cost of Rs 2 crore.

The company has recently completed setting up of a molecular biology facility at the Ticel Bio Park in Chennai. The facility will cater to the quality-testing requirements of biotech companies.

Apart from managing the company, he likes to spend time with his three-year-old grandchild Gaurav. He also has an unusual taste of collecting pipes and lighters. "During my trips abroad I started collecting pipes and lighters and so far have over 60 of them," he proudly says.

He is a self inspired person who likes to dream about the future of the company and tries to achieve the targeted goals. According to him, his respect for time has made him what he is today.