Regenix Drugs to invest Rs 25cr in retail chain

Chennai-based pharmaceutical company, Regenix Drugs, will invest Rs 25 crore in its diversification into retailing which will see the company opening 200 'Supermed' pharmacy and surgical stores in south India over the next two years.

Regenix expects to fund the expansion through a combination of internal accruals, private equity and bank loans.

The company is in talks with a few private investors and expects to clinch a few deals soon. "Investments in each store will be between Rs 4 lakh and Rs 10 lakh," said D A Ramamurthy, managing director.

In the first phase, Regenix plans to open 50 stores by March 2008. The company will shortly open 10 stores in Coimbatore, Tanjore, Thiruchendur, Thirunelveli and Tiruvallur. In the second and third phases, it will open 150 more stores in all parts of Tamil Nadu as well as in Karnataka and Kerala. Regenix is targeting revenues of Rs 200 crore by 2013 through its pharmacy retail chain.

The company will adopt a hub-and-spoke model under which each district will have one hub (warehouse) to supply drugs and other items to the spokes (stores). The hubs will be spread over 1,000 sft, while spokes will be spread over 200-500 sft, Ramamurty said.

These pharmacies will sell imported drugs, surgical items, vaccine, hospital consumables, eyecare products, diagnostic kits as well as medical and surgical equipment.

The company expects to offer certain generic drugs 30 per cent cheaper as it will procure these products directly from the manufacturers.