Aventis lines up Rs 16 cr capacity spread

Aventis Pharma Ltd is planning a capacity expansion of Rs 16.5 crore. Chairman Vijay Mallya said at the company's 49th annual general meeting today in Mumbai that the expansion was for larger market requirements locally following its merger with Sanofi. The expansion will be at its facility in Goa.

Mallya said the company is expecting a big boost in the overall performance especially after the consolidation with Sanofi. However, he said the Securities and Exchange Board of India (Sebi) has still not authorised the merchant bankers to proceed with the mandatory public offer, which was to open in October 2004. Since this is unusually a long review period for Sebi, the company is uncertain about the same.

The company has launched a line extension of its product Cardace H during this year, he said. "Though, the imminent introduction of VAT from April this year affected sales of the industry in the first quarter, Aventis was one of the very few companies to turn out good results," he added.

The healthy results in the first quarter compared with the de-growth in the industry is a reflection of the capabilities of the field force of the company, Mallya said

However, the-non introduction of value added tax (VAT) by some states is still a concern as this leads to infiltration of goods from a state where the VAT rate for medicines is only 4 per cent as compared to the higher rate of sales tax in the states, which have not introduced VAT.