Suven to set up Rs 50 crore plant in Vizag

City-based pharmaceutical company Suven Life Sciences is expected to invest close to Rs 50 crore in setting up a plant for advanced APIs (active pharamceutical ingredients) at the upcoming Pharma City project at Visakhapatnam. The Rs 50-crore Suven is expected to finance the project through a mix of internal accruals and debt.

Speaking to newspersons on the sidelines of a press conference, Venkat Jasti, managing director of Suven Life Sciences, said that the company's plant at Pharma City would be a US FDA approved plant.

"We will be using the plant to make advanced APIs and there is no point setting up a plant today without it being US FDA approved," Jasti said.

"We have no debt on our balance sheet and hence attracting debt should not be a problem to finance the plant," Jasti said.

The Rs 162-crore project near Visakhapatnam had earlier attracted sharp criticism from the Bulk Drug Manufacturers Association (BDMA) over the reported pricing of plots.

Jasti, who is also the president of the BDMA, had at that point of time regretted that The BDMA, set up by the government to promote the pharmaceutical industry in the state, had not even been consulted over such an important issue of concern to the industry. The industry, he said, was upset that the promoter, Ramky Group, had priced an acre at Rs 20 lakh.

The reported high price per acre would have made every plot in the pharma city worth Rs 1 crore. "At such pricing it would be difficult to attract prospective investors, who are mostly small and medium scale units," Jasti had pointed out.

The Pharma City project has been taken up as a public-private partnership with the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) holding 11 per cent equity and the rest is held by the Ramky-led consortium.

The state government mooted the project as the AP Pollution Control Board (APPCB) has imposed a ban on the setting up of new pharmaceutical units in the districts of Hyderabad, Ranga Reddy, Mahbubnagar, Nalgonda and Medak. The Pharma City project was envisaged to offset the adverse effect of the ban which has been in force for the past five years.

The first phase of the project is being taken up over an area spread across 1,900 acres. Of this, 400 acres would be set aside for common facilities like roads and other supporting infrastructural facilities like a state-of-the-art common effluent treatment plant, common boiler system, marine outfall etc and 1,500 acres are to be developed into 300 plots of five acres each. Already, around 70 companies have been said to have evinced interest in the Pharma City project.

As regards the current controversy, it may be noted that it is APIIC which has procured around 2,100 acres for the Pharma City at Parawada located 33 km from the city of Visakhapatnam.

The Hyderabad-based Ramky Infrastructure Limited has submitted its proposal for the development of the Pharma City in consortium with Vivandi of Germany and Sembi Corp group of Singapore. The project is envisaged to bring all the ingredients to attract world-class pharma manufacturing facilities with significant investment.

The proposed facilities include uninterrupted power supply, ample availability of water, state-of-the-art common effluent treatment plant (CETP), common boiler system, marine outfall etc. The proposed marine outfall, with a 16-km underground pipeline, will deliver the treated waste into the Bay of Bengal.

"As of now, such a delivery system is available only in Singapore," sources said. As per the partnership agreement, the private developer will have to take up the construction of CETP and Marine Outfall facility at an estimated cost of Rs 26.6 crore and Rs 27.4 crore respectively.

The state government hopes to build on the present strength of Andhra Pradesh as one-third of the Indian bulk drug production is carried out from the state alone. Nearly 70 pharma companies across the country are said to have evinced keen interest in the proposed Pharma City.