Ahmedabad-based intravenous (IV) fluids manufacturer Core Healthcare Ltd (CIL) has decided to focus more on institutional sales in the domestic market and international tenders in a bid to increase capacity utilisation.
At present, the company has a capacity utilisation of around 30 per cent to 50 per cent across different product segments.
Nayan Rao, director, CIL, said: "We have decided to actively participate in the institutional business mainly medical colleges in the next fiscal. Also, we are negotiating with new corporate hospitals to supply the entire requirement of IV fluids from the inception".
To illustrate, he said that medical colleges in Tamil Nadu alone float tender worth Rs 5 crore per annum.
He hoped that the twin measures- increased institutional sales and international tender- would increase the capacity utilisation between 10 and 20 per cent respectively. However, the bottomline is not expected to increase as margins are low, though the company will not incur additional marketing expenditure and other overheads.
The company claimed that it was the largest player in the Indian IV fluid market with a share of 40 per cent and account for 90 per cent of the IV fluids exported from the country.
Its portfolio includes critical care products, disposable products and renal care products.
Commenting about the financial performance, Nayan Rao said they hoped to finish this fiscal with an operating profit of Rs 15 crore on a turnover of Rs 135 crore. For the fiscal ended March 2001, the company reported a net loss of more than Rs 50 crore.
Nayan said, "The main factors that have lead to the recovery are strategic decisions to offer contract- manufacturing services for small volume injections to domestic and international players and cost savings through advance payment on raw materials". The company was able to realise a cash discount of 15 to 20 per cent of the purchase price because of advance payment on raw materials, he added.
