Hyderabad-based drug maker Aurobindo Pharma Limited (APL), which has targeted to cross $2 billion (Rs 10,000 crore) in revenues by 2013, proposes to invest Rs 250 crore every year for the next five years amounting to a total investment of Rs 1,250 crore.
During 2009-10, the company expects to post a consolidated revenue of Rs 5,000 crore as against Rs 3,168 crore in the previous year.
“My goal is to ensure that Aurobindo emerges as one of the top three pharmaceutical companies in the country and also secures a place among the top 10 drug makers in the world in a span of 3-5 years,” APL chairman, PV Ramprasad Reddy, told Business Standard.
APL, which has a strategic alliance with global pharmaceutical major Pfizer Inc, has 15 manufacturing facilities including five formulation units approved by various regulatory authorities across the globe. It is marketing its products in over 100 countries.
From the current year onwards, he said, APL would have a cash flow of Rs 800 crore. Of this, Rs 250 crore would go for capital expenditure and Rs 150 crore towards working capital margin. The remaining Rs 400 crore would be free cash flow to be utilised for funding the redemptions (if any) of foreign currency convertible bonds (FCCBs) over the next two years.
At present, APL is constructing a separate block for production of oral contraceptives at cost of Rs 60 crore at its facility in the special economic zone near Jadcherla, about 100 km from Hyderabad. The dedicated plant is expected to be completed by the middle of next year. Last month, APL launched AuroSource, its new Rs 100-crore division for providing custom research and manufacturing services (Crams).
Reddy said APL would be recruiting over 2,000 people in the current year. Of these, 500 persons would be engaged in Crams, 1,000 in production and the remaining 500 in research and development.
By next year, he said, APL would not have any long-term borrowings other than the working capital loan. All outstanding FCCBs would be either converted into shares or redeemed.
“The company’s outstanding FCCBs are to the tune of $135 million. The last tranche of FCCBs has to be converted or redeemed in May 2011. If it does not get converted or come up for redemption, we have to pay $190 million. For this purpose, we have enough funds. If there is any shortfall, we may go for external commercial borrowing,” Reddy said.
APL is likely to enter the Canadian market by this year-end when Health Canada, a department of the Canadian government with responsibility for national public health, is expected to approve at least 25 of the 80 products the company has filed for approval. “So far, Health Canada has approved 11 of our products. We want to have a basket of at least 25 approved products to launch our operations in Canada,” Reddy added.
