In a conversation with Jyotsna Bhatnagar, CEO and MD of Hester Biosciences discusses the company’s journey towards becoming India’s second largest poultry vaccine manufacturer.
The controversy over cow nationalism may have sounded the death knell for meat exporters and the leather industry, but it’s a windfall for those in the business of veterinary health. Ahmedabad-based Hester Biosciences is one such player which finds itself on winning turf with the growing clamour for steps to ensure better health of cattle and the need to increase milk yields. Set up by a first generation entrepreneur Rajiv Gandhi in 1987, Hester Biosciences is one of India’s leading animal healthcare companies as also the country’s second largest poultry vaccine manufacturer.
Though the market size of the animal health products worldwide is pegged at around $30 billion, the Indian market is a mere $700 million. In the wake of a resurgent interest in the health and longevity of cattle following the Centre’s diktat to ban cow slaughter, there is immense scope for growth. The company, thus, is busy promoting awareness on large animal health in the hinterlands and is simultaneously exploring possibility of new product launches. It’s a perfect opportunity to meet the sprightly and energetic Gandhi. We choose Timpani, the all day dining restaurant at Radisson Blu at Ahmedabad’s swish Panchvati cross roads as the venue for our luncheon, both for its excellence in food as also for its proximity to the Hester Biosciences headquarters.
The tantalising spread of mouth-watering dishes at the buffet counter beckons us and we unanimously decide to sample the tastefully laid out culinary delights instead of ordering from the extensive a la carte menu. An entertaining raconteur, the CEO and MD of Hester Biosciences reveals that it was the veterinary business that chose him and not the other way round! Born and brought up in Mumbai, Gandhi proudly proclaims that he does not hail “from an industrial family or a financially rich background. “My father was a small-time trader who supplied bulk drugs to pharmaceutical companies.”
A commerce graduate, Gandhi recalls his desire to enter a “better business with lesser uncertainties” and it was with this in mind that he mulled the option of acquiring distribution rights for human medicines, more so since traders and intermediaries were fast losing relevance. Unable to make headway on account of the “set channels” that blocked his foray, Gandhi grabbed the sole offer he got—distribution rights for animal health products of pharma major Cynamid India (which subsequently merged with Wyeth) for the Thane and Raigad region. We move to the soup counter where I opt for the chicken lemon coriander soup, while Gandhi helps himself to a ladleful of rosemary and pumpkin soup. “For me, entering the animal veterinary business was a huge challenge specially since I was clueless about animals.
Never in my life had I visited a poultry farm and the first time I visited one, I was astounded to see so many chicks together,” he confesses laughingly adding that “the only non-vegetarian item I was familiar with was eggs since I ate eggs!” Interestingly, to this day, Gandhi is a vegetarian despite heading an animal health and biological products company. Lack of domain knowledge about animals, however, proved no deterrent for the shrewd Gujarati blessed with innate business acumen. Way back in the 1980s there were few distributors of animal health products which forced people to travel long distances to procure them.
Capitalising on this, Gandhi commenced farm delivery of these products and soon captured the market enabling him to become the leading distributor within just two years. Expanding his portfolio, Gandhi started supplying disinfectants and other chemicals required by animal farmers, leading to an expansion of his product portfolio as well as geographical terrain to cover the entire country for leading pharma companies. Taking another break, we head to the main course section. And while I heap my plate with helpings of spiced chicken tikka, aromatic fish masala, crispy chilli vegetables accompanied by egg cake with tomato sauce, my host goes for the veg au gratin and veg balls in manchurian sauce along with veg pad thai noodles.
It was in 1987 that Gandhi formed Hester Pharmaceuticals, a private limited company with a hope that “someday I may do something in the structured pharma space like manufacturing and formulations.” This was followed by a sole distributorship for a Japanese company Ghen Corporation for their animal products portfolio and when that company acquired a poultry vaccine manufacturing company in the US, Gandhi became an international distributor. Studying the market, he realised that prices of poultry vaccines were significantly high in India. “I suggested to Ghen’s US subsidiary that we should explore the possibility of setting up a manufacturing unit in India and to my utter surprise, they agreed,” he recollects.
With virtually no experience in setting up a plant and absolutely no financial strength Gandhi still went out on a limb, forming a JV with his foreign counterpart, giving 10% equity in lieu of technology transfer and floated an IPO in 1994. “Those were the days when capital markets were totally different and it was relatively easy to raise money, “ reminisces Gandhi, and thus the foundations of the country’s second largest veterinary biological and health products company were laid “with no land and only a commitment from a collaborator about technology transfer.” Fortune, however, favoured the audacious Gandhi who decided to move out from Mumbai to the “relatively cheaper Gujarat” for setting up his manufacturing facility.
After protracted cost and time overruns, the unit was set up at Mehsana and following the split with its collaborators in 2003, Hester became a 100% indigenous company producing poultry vaccines. The going was rough initially with an empty order book position and mounting debts. A surprise FAO order changed all that with Hester securing a tender for supply of poultry vaccines to Iraq. “We filled up the tender for a lark and were shocked when we bagged it,” chuckles Gandhi. A calculated risk in shipping the products to an unknown Jordanian trading company which promised to deliver the consignment to Iraq without secured payment upfront paid off, turned the tide in favour of Hester putting it firmly on the fast road to success.
Today, Hester is the one of the largest animal health care companies in India and the second largest poultry vaccine manufacturer after Venky’s. Unlike Venky’s, however, Hester has consciously decided against entering the FMCG space and has, instead worked towards expanding its presence in poultry health products, large animal vaccines and large animal healthcare products. The company’s product basket comprises 45 live and inactivated vaccines in the poultry segment, four live and inactivated large animal vaccines along with numerous healthcare and diagnostic services. A research-driven company, Hester has a state-of-the-art R&D center in Kadi near Ahmedabad. A WHO-GMP, GLP, ISO 9001, ISO 14001 and OHSAS 18001 certified company, Hester is accredited by the department of scientific and industrial research which has leveraged molecular engineering technology to develop a new generation of recombinant vaccines.
It is also working with GALVmed, a British-based NGO supported by the Bill and Melinda Gates Foundation to market its thermostable Newcastle disease vaccine in India. The two partners are aiming to create a sustainable distribution network, which is linked with Hester’s current network. A sales team of 85 people has been created, while the firms are selecting and training ‘vaccinators’ from within communities for door-step delivery of the product. A visibly elated Gandhi dreamily describes his meeting with Bill Gates about a year ago as a high-point of his professional life. We take yet another trip, this time to the dessert counter, a gourmet’s delight with exotic delicacies including kiwi eclairs, coconut kala jamun and chocolate mousse.
So what is Gandhi’s mantra for success? “Frankly, there has been no script that I have followed. The fight for survival has charted my course,” he admits candidly. However, a distributor at heart who believes in mastering his territories, the Hester Biosciences CEO and MD, as a thumb rule, “only produces what I can sell.” And with cows set to occupy centrestage in the country in the forseeable future, it is not surprising that he is already mulling creating a division dealing exclusively with scientific management of cows specialising in prevention and curative diagnostics. Its a project that is destined to be a winner from get go.
Rajiv Gandhi is CEO & managing director, Hester Biosciences Ltd