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C.R. Sukumar

To reflect the new fields the company venturing into, the board has approved another proposal to change the name of the company to Krebs Biochemicals and Industries Ltd.

Hyderabad , Sept. 9

KREBS Biochemicals Ltd (KBL), the Hyderabad-based Rs 102-crore manufacturer of bronchodilators, decongestants, cholesterol reducing drugs and nutraceuticals, is planning a foray into the business of food and agro-based products.

The company has drawn up plans to create additional capacities in existing products to achieve economies of scale, a senior KBL official told Business Line.

Keeping in view the requirement of additional finance for these expansion projects, the KBL board has approved a resolution enabling it to borrow money exceeding the aggregate of the paid-up capital and its free reserves but not exceeding Rs 200 crore.

Seeking approval of shareholders for taking up the proposed activities, the company said it was confident that proposed expansion and diversification plans would be in the best interest of the company for achieving multi-fold growth in turnover, profitability and shareholder value.

On the outlook for the company, the management informed the shareholders that the growth potential was flat for the products of unit-I — ephedrine and pseudoephedrine - and there was greater scope and growth potential for the products of unit-II, which manufactures lovastatin, simvastatin and vitamin-C.

However, the company was hopeful of increase in the usage of pseudoephedrine in view of discouragement of other drugs such as phenylpropanalamine and nimesulide in the same segment.

The company informed the shareholders that the market for statins was showing improvement and demand for them was expected to grow from the present levels as more and more useful effects of preventive dosage were being known. Similarly, vitamin-C, being nutraceutical, has wider applications in the area of pharmaceuticals, feeds, food beverages and other healthcare products.

Currently, majority of the company's products were exported to various countries, principally the US, as pseudoephedrine is a popular over the counter (OTC) drug in overseas markets.

According to the KBL official, the company expects the recently obtained European Certificate of Suitability to enable it successfully enter the high-price-end markets such as Western Europe and Northern American countries. The company is currently in the process of becoming an approved vendor for the sourcing of its ephedrine, pseudoephedrine and statins with some of the MNCs and leading pharmaceutical organisations in the US and Canada.

The company, which is currently in the process of installing a co-generation power plant at unit-II to be completed during the current fiscal, expects the cost of power to substantially get reduced and thus increase the company's profitability, the official said.

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