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We want to be known as a wellness company: Philipe Haydon

Interview with CEO, The Himalaya Drug Company

Mahesh Kulkarni Bangalore
The Himalaya Drug Company, the Bangalore-based herbal health and personal care company, has embarked on a consolidation-cum-expansion drive in an effort to transform itself into a FMCG player rather than just a pharma and herbal healthcare products maker. The company's chief executive officer Philipe Haydon outlines the company's strategy to Mahesh Kulkarni. Edited excerpts:

When you took over as CEO of pharma division in 2007, you had set out on a task of transforming Himalaya into a healthcare company. Have you succeeded in the goal?
Until 1998-99, we were only a single division prescription pharmaceutical company and we launched our personal care products somewhere in 1998 under the brand name Ayurvedic Concepts. The first few years were quite struggle and there was disconnect among the consumers about the image of Himalaya. Some knew it as Liv-52 company (Liv-52 is the most popular drug from Himalaya to treat liver disorders) and some knew it as ayurvedic drug company.

 

We always had certain set of products like tooth powder, hair oil, shampoos and dental cream and distributed among our staff internally. We felt it was right time to take them to consumers and brought everything under Himalaya in 2001-02. We began the journey of transformation then under Himalaya Healthcare. The actual take off happened in 2004-05 onwards.

Within Pharma we ceased to be a single do good Ayurveda Company and set up nine specialist divisions. Our employee strength grew from 400 to 2,500, while the total headcount is in excess of 5,000 currently. Today, we have 200 products across four main business verticals such as pharmaceuticals, personal care, baby care and animal health. Our turnover has grown four-fold to Rs 1,200 crore in FY14 from Rs 300 crore in FY2008. In FY15, we are set to achieve a turnover of Rs 1,500 crore.

What is the share of pharma and personal care products in your total business?
Both pharmaceuticals and personal care products segments contribute 38% each to our total business currently. Other two divisions like baby care and Animal health divisions account for 8% and 4% respectively. The balance comes from the overseas business. Today, we sell in 85 countries and manufacture in some of those countries. However, going forward, we expect personal care products business to overtake pharma vertical and account for about 50% of our total sales in the next five years.

Where does Himalaya stand in the personal care or FMCG space?
Himalaya is still a baby in the FMCG segment. But, in a short time, some of our products have become very popular. Our Neem face wash is a market leader with 21% share in the cleansing category. We have 17.9% share in the face packs and 13.1% share in the face scrubs market. We have recently entered the men's face wash category and also working on launching many new products like shaving cream. Overall, our FMCG products business is growing at 40% annually.

Having transformed the company into a multi-product company across various segments, what is the next goal ahead of you?
We want Himalaya Drug Company to be known as a wellness company and our goal is to keep our consumers well from head to heel. Our aim is to spread wellness in every home through our herbal healthcare products. In the course of next six years, we want to achieve $1 billion revenues (Rs 6,110 crore), half of which will come from domestic sales and the remaining half from overseas sales. Out of Rs 3,000 crore business expected from the domestic market by the year 2020, we expect personal care products vertical to contribute close to 50% at Rs 1,400 crore.

What is the roadmap ahead to achieve this target?
We are embarking on a consolidation and expansion programme for every product segment. We have in the recent years established market leadership in some of the products like women's face wash and baby care products. We have recently entered the men's grooming products segment, which we wish to consolidate further and expand the product range. We are also expanding our offerings in animal healthcare and pharmaceuticals segment.

To achieve this target, we need to grow at a compounded annual growth rate of 19%. We are currently growing at 25% annually and in some products the growth rate is much higher. For example, in baby care products segment, we are growing at 100% and even if we don't sustain this growth we are sure of achieving 70-80% year on year. In personal care products, we are growing at 40%. Pharmaceuticals and animal healthcare products segments are growing at 15% and 30% respectively. We will also be relaunching our oral care and nutrition products. We have recently created a new vertical for dermatology and under this segment, we will be launching at least 10-12 new products in the next one year.

How strong is your research and development division and what are the new drugs you are working on?
Our main strength is in research and we conduct at least 10 years of research before introducing any new drug or a product. Currently, we have 270 scientists engaged in R&D work and at least 80 new products are in the research pipeline. We are in advanced stages of conducting clinical trials in the areas of oncology, Type-II diabetes and women's disorders and launch many new drugs in the next two years. In personal care segment, we want to launch several new products to take on FMCG majors.

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First Published: Oct 14 2014 | 5:06 PM IST

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