After achieving reasonable success with its formulation exports in developing countries, the company has set its eyes on the five largest generics market, that is, US, Europe, Japan, Mexico and Brazil. Amongst the developed nations, Ipca already has a presence in the UK market, where it sells through distributors. Once our subsidiary is established and the product registrations are in place, we will be able market products on our own terms, managing director, Premchand Godha told FE.
First on its growth prescription, is its entry into the US markets, which will entail an investment of Rs 20 to Rs 50 crore, depending on the number of products the company would want to register. Each registration can cost anything between Rs 4-6 crore.
The subsidiary in the US is expected to be fully operational in the third year of its inception and one in UK will take about two years. We expect that the exports business, which has witnessed a healthy growth so far, will see a quantum jump once these subsidiaries are operational, said Mr Godha.
The company is also going to decide on a final blueprint to chalk its entry strategy for large markets like Mexico and Japan by the end of this year.
Ipca has already set up a subsidiary in Brazil and the currently awaiting product registrations. This subsidiary will be operational by the last quarter of the current financial year. Whereas, the companys subsidiary in Nigeria, which was primarily dealing with bulk drugs have just entered the formulations business.
The company has witnessed a 20 per cent growth in its export turnover in 2002-03 to Rs 279.21 crore from Rs 231.28 crore in 2001-02. While net income grew from Rs 416.89 crore to Rs 484.52 crore during the same period.
...To Upgrade Silvassa Plant
The company has earmarked a sum of Rs 25 crore to upgrade its formulation plant at Athal, in Silvassa, to get it approved by the US FDA. The plant, which is already approved by international bodies like the UK MCA, MCC South Africa and TGA Australia, will need to be upgraded further to meet the stringent norms laid down by the US FDA. The company proposes to spread the proposed capex of Rs 25 crore over a period of two years. Currently, in the drawing board stage, the company expects to complete the upgradation task by December 2004.