Ranbaxy Touching Tempestuous 50

New Delhi, Aug 25 | Updated: Aug 26 2004, 05:30am hrs
Ranbaxy Labs is setting up two new subsidiaries in Canada and Portugal. With this the company hopes to establish its presence in all potential markets across the globe. Ranbaxy already has 42 subsidiaries globally.

At present, domestic revenues account for 18-19 per cent of Ranbaxys turnover. The idea is to bring this down to around 10 per cent over the next few years. Some of the overseas markets, including the US and Europe, are growing much much faster, Ranbaxy managing director and CEO Brian Tempest told FE.

Even Russia and Brazil are growing much faster than India, he said. It is not that the company has lost interest in India. We want to be the number one company here, Dr Tempest assured. In absolute terms, the Indian business will actually grow. We plan to build consumer healthcare business in India, he added.

Ranbaxy had announced plans to set up a subsidiary in Australia earlier this year. This will become operational in the next few weeks.

The company is in discussion with a few companies in Pakistan to start its operations in the $1-billion Pak market. Feasibility studies are on.

On a global basis, Ranbaxys geographical network is actually almost everywhere. There are actually (just) a handful of places where we are not present. We will initially be entering the generic market in Canada and Portugal. When we enter a new market, we dont try and cater to both (generic and branded) segements initially. It is only after we attain maturity that we enter the branded segment, Dr Tempest said.

The generic market refers to the market where drugs are sold under their generic names after the patent on the drug has expired. The branded market refers to the market where products are sold under the brand names of various companies.

Most of the subsidiaries Ranbaxy is planning to set up now will be in the form of marketing and distribution companies. The company has no plans to set up manufacturing bases in these countries. Dr Tempest feels that the best place to manufacture is still India.

The $8-billion Canadian market is the 8th largest market in the world. It is equally split between the generic and branded market. After getting the approval at the national level, Ranbaxy has to get approval at the state level as well.

On Europe and his foray into Portugal, Dr Tempest said, Our products are on sale in most European markets. The $2-billion Portuguese market (ranked 23rd in the world) is really opening up and the local government is giving a lot of benefits to generics.

Ranbaxys total revenues are around Rs 4,461 crore. India chips in Rs 850 crore. Ranbaxy has set a target of becoming a $2 billion company by 2007, up from $970 million achieved during the year ended December 2003. Over the next few years, while Ranbaxys US business will contribute around 45-50 per cent of its total revenues, European markets will contribute around 20 per cent. Brazil, Russia, India and China (BRICS) and rest of the world will have a 30 per cent share in total revenues. Indias share in that is likely to be around 10 per cent.