Leapfrogging

INTERVIEW: Girraj Vijayvargiya

'Our target is to cater to multinational companies'

Afew years ago Ankur Drugs and Pharma had a turnover of Rs 3 crore which, making a steady year on year jump, today stands at Rs 135 crore. The company is eyeing a target of Rs 450 crore this fiscal with acquisitions and greenfields projects. Girraj Vijayvargiya, director of the company talks about the company's expansion plans and how it plans to reach the target which is three times higher than what stands now.

What is your current manufacturing capacity?

In Daman plant, we have a capacity of 1440 million tablets, 270 million capsules, 24 million bottles of liquid orals and 12 million bottles of dry syrup per annum. And in Himachal Pradesh plant which is coming up soon, the figures stand at 4000 million tablets, 600 million capsules, 162 million bottles of liquid injectibles ,19 million bottles of dry syrup and 72 million bottles of dry powder injectibles. At present our own plant is not operational so we are using the facilities of the Vaibhav for manufacturing drugs.

What is the difference in Daman and Baddi in Himachal ?

The new plant in Himachal Pradesh is eligible for excise duty exemption for 10 years and income-tax exemption for five years. The government has implemented MRP-based excise duty in pharma industry with effect from January 8, 2005. The difference between cost and MRP is approximately 7-8 times. Therefore, on account of nil excise duty there will be huge saving to the customers on excise amount and in turn company can demand higher margins from the customers. As on date, we are manufacturing low value product and Drug Pricing Control Order (DPCO) products at our Daman plant.

What are your expansion plans?

Ankur is setting up a plant at Baddi (Himachal Pradesh) as per US-Food and Drug Administration (USFDA) and UK-Ministry of Health and Regulatory Affairs (MHRA) standard with an investment of Rs 135 crore. The plant is in the final stage and it will become operational by June end or by the first week of July. The company has already announced the merger of associate company Vaibhav Healthcare, effective from January 1, 2006. The Vaibhav plant is also undergoing an expansion with an investment of Rs 65 crore in Himachal itself.

What is the kind of growth you foresee for this year for your company?

This year alone with our Ankur plants we are targeting a turnover of Rs 240 crore and merger of Vaibhav with our company will help us consolidate our presence further. We expect a turnover to reach Rs 450 crore this fiscal and we may be the largest contract pharmaceutical formulations manufacturer in India with a gross block of approximately Rs 300 crore.

At present, who are your clients in contract drug manufacturing?

We are doing contract manufacturing for majors like Ranbaxy, Cipla, Torrent, makers, Khandelwal laboratory and many others. Our major turnover comes from Ranbaxy which comprises 50-60 per cent of our total turnover. We have received several enquiries form other multinational companies also, however, because of capacity constraints we have not entered into contracts with several other pharma companies. Once our plant becomes operational we can go for tie-ups with these companies as well.

Being an SME, what are your expectations from the government?

The biggest expectation is the consistency in government's policy. One sets up a plant considering the present policy of the state. If the policy changes with the change of the government, we suffer. If the government wants the industrial set-ups, at least it should provide the basic infrastructure viz : water, road and power.

"The biggest expectation is consistency in government policies. If the policy changes with the change in government, we suffer"

Girraj Vijayvargiya, Director, Ankur Drugs & Pharma