Ranbaxy to make China a major sourcing hub

Pharmaceuticals major Ranbaxy Laboratories plans to leverage the cost advantage of Chinese raw materials by making China its major active pharmaceutical ingredient (API) sourcing hub.

The company, which already has a Chinese presence through a joint venture named Ranbaxy Guangzhou China (RGCL), will explore new partnership options to facilitate raw material outsourcing.

RGCL would continue to focus on manufacturing medicines for exclusive supplies to the Chinese market, Malvinder Mohan Singh, CMD, Ranbaxy said.

Speaking to reporters on the sidelines of a CII conference on life sciences today, Singh said that Ranbaxy saw China's low-cost raw material manufacturing ability not as a threat, but as an opportunity for reducing its manufacturing expenses. "The company's interest in API manufacturing will continue to be strong. However, we will try to maximise our profits by importing huge quantities of APIs from China," he explained.

The company is also expecting to expand its bio-similar drugs (low cost biotechnology medicines) business in a big way. "Bio-similars have a great future. Lot of capabilities and knowledge have to be unlocked in this segment," he added.

According to Singh, Ranbaxy plans to create a lot of value by leveraging on the strength of its newly acquired biotech company, Zenotech Laboratories. Zenotech has two biotechnology-based cancer offerings in India and eight more are being developed. Its medicines are expected to be cleared for shipping to Europe by 2011.

Singh also hinted that Ranbaxy would continue to explore business opportunities in areas where there are high entry barriers. "We are evaluating speciality areas where there is less competition. Ranbaxy may enter such areas, oncology for instance, in future," he said.