The gelatin capsule making company has approached a consortium of banks lead by Hongkong Bank. The other bank likely to be involved is Deutsche Bank. While the proposed ECB plan has raised many eyebrows, Banner Pharmacaps officials said the company is confident that the fund raising programme will sail through, going by the parent company's financial strength. It is the second largest softgelatine producer worldwide.

The debt equity ratio of the project with an investment of Rs 45.5 crore is 1:1. While the company has tied up with Hongkong Bank for a term loan of Rs 11 crore and an ECB of Rs 14.5 crore, the remaining funds will be met by equity.

Banner Pharmacaps India is a 51:49 per cent joint venture betweenBanner Pharmacaps Inc and Vikram Tannan, the Indian promoter.

``We will begin commercial production at the new unit at Attibele in December. The unit will have total production capacity of two billion unit of gelatine capsules per annum,'' executive vice president (operations) V Madhusudan said. The company recorded a revenue of Rs 25 crore last fiscal and is eyeing another Rs 50 crore from the new facility.

The company will export around 40 per cent of the production, while the remaining 60 per cent will be earmarked for domestic market. Banner Pharmacaps India also has a buy-back arrangement with the parent firm.

Around 60 per cent of total exports will be set aside for buy-back.

The major customers of the company, which has another plant in Gujarat with one billion units capacity, include Glaxo, Hindustan Lever, Ranbaxy, Aristo, E Merck and Wockhardt.

It is also mulling over the possibilities to shift its R&D centre to Bangalore from Mumbai. The R&D unit, which was set up in Mumbai two yearsback, will be located at the company's new facility in Attibele.

According to Madhusudan, around 20 new products are on the anvil. Over the last few years it unveiled eight new products in the domestic market. The estimated domestic demand for the gelatine capsule is around 5-6 billion a year, while the existing manufacturing capacity in the country is 3-4 billion units only. The market is partly dominated by about 20 companies which are in the unorganised sector.

Besides pharmaceutical formulations, the gelatin capsule is used in cosmetics, perfumes, and shampoos.