Flamingo Pharma plans domestic expansion

To set up a cardiovascular, anti-diabetes divisions.

Mumbai-based Flamingo Pharmaceuticals Ltd (FPL), is eyeing the growing market of cardiovascular, anti-diabetes and critical care hospital segment in the Indian pharmaceuticals market for which it is planning to set up new divisions in the country.

The company, with primary expertise in manufacturing antibiotics and analgesics, will now focus on domestic cardiovascular, anti-diabetes and critical care for the hospital segment. Flamingo Pharma will be setting up two separate divisions to cater to these segments.

A cardiovascular and anti-diabetes division and a critical care- hospital division will be created to tap the potential market of cardiovascular, diabetics and critical care-hospital segments in India.

"Both the divisions will be created and made operational before March 2008", said Ashwin Thacker, Managing Director, FPL.

According to Thacker, the domestic market of cardiovascular and diabetes is growing at a rate of 25 per cent, while the critical care-hospital market has registered a growth between 20 and 25 per cent over the last few years. As per industry estimates, the cardiovascular and diabetes markets size taken together would stand at Rs 2,000 crore, whereas the market size of critical care for hospital stands at Rs 1,000 crore in the domestic market.

In the next two to three years, the company expects to churn out approximately Rs 50 crore turnover from each of the two divisions that it would set up. Explaining the reason for long gestation period for the division to show the above mentioned turnover, Thacker said, "At least two to three years would be required by both of these divisions to penetrate into the market". The company will be recruiting 500 personnel for both divisions.

Presently, a large chunk of the company's business is generated from its international operations. Out of the total turnover of Rs 190 crore , the international business has contributed Rs 170 crore, while the rest comes from its domestic operations.

From its international business, the larger share of revenue is generated from the semi-regulated pharma market amounting to Rs 110 crore, while only Rs 60 crore is generated from the regulated pharma market.

The company expects to gain more from its operations in the regulated market owing to its growth at 50-60 per cent.

As part of its expansion plans, the company will roll out a range of products in Ahmedabad and other cities of Gujarat.

According to the company, Gujarat accounts for approximately Rs 300 crore of India's pharma market. The company has already launched its operations in South, North and Eastern parts of the country and has just entered the Gujarat pharma market. "We are aiming to have pan India presence by September 2007", added Thacker.

In Gujarat, Flamingo is targetting revenues of approximately Rs 15 crore by the year 2009 and a market share of 1.25 per cent on an annual basis.

Flamingo plans to tap the retail market through a network of distributors along with a team of field staff numbering around 30 representatives. The company targets to have over 50 distributors and wholesalers to cover the western part of the country.