NecLife to invest Rs 400 crore into neutraceuticals

Chandigarh-based Nectar Lifesciences Ltd (NecLife), an integrated pharmaceutical organisation offering comprehensive range of cephalosporin active pharmaceutical ingredients (APIs) and finished dosage forms (FDFs), is foraying into neutraceuticals.

The company plans to set up 100 per cent export-oriented unit in Maharashtra with an investment of Rs 400-500 crore.

Speaking to Business Standard, Chief Executive Officer Dinesh Dua said: "We have identified the location and are in negotiations with the state government for the proposed project. So far as investment is concerned, it would be to the tune of Rs 400-500 crore in setting up a new unit in Maharashtra, which will be funded through internal accruals, debt and also through private equity funds.

He also hinted that the company may also opt the foreign currency convertible bond (FCCB) route or convertible debentures for raising the funds.

"Engaged primarily in API manufacturing and exporting, NecLife's product portfolio comprises SSP and cephalosporins (in both oral and sterile forms), both of which are anti-bacterial and manufactured in India

On the location for the proposed project, he said, "The basic raw material for neutraceuticals is milk. The price of milk in global market is about Rs 10-12 per litre, while in Punjab it costs about Rs 18 per litre. Moreover, Punjab faces shortage of milk during the summers as over dozen of milk plants are operational in the state. We have selected Maharashtra over Punjab because the price of milk in Maharashtra is on a par with global prices and also to avoid any supply constraints."

The proposed plant is expected to be operational by mid of 2009. The company will extend the final product, neutraceuticals, as raw material for API. He added that the company has plans to file drug master file (DMF) in the US, so that the final product can be used straightway into formulations.

Currently, the company has manufacturing facility at Derabassi (Punjab) for the manufacture of oral and sterile range of active pharmaceutical ingredients (APIs) and formulations, which is spread over 60 acres of land.

Also, it has one more unit in Baddi (Himachal Pradesh) to manufacture formulations, spread over 10 acres.