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P.T. Jyothi Datta

`Local acquisitions in future will not be to grow in size. Rather, they would be to strengthen the company's base in a given therapeutic area.'

Mumbai , June 23

IT is strategising time for Indian drug majors. The Mumbai-based Nicholas Piramal India Ltd (NPIL) is in the process of unveiling "Project Agya Chakra" - a five-year plan that looks to prioritise "organic growth", besides intensifying the company's focus on existing segments.

Literally translating into "Third Eye", NPIL's three-fold plan seeks to drive the company's growth at the domestic, exports and research and development (R&D) levels.

Only last year, Ranbaxy had unveiled its "Vision Garuda" strategy, a 10-year plan that aimed at clocking a revenue of $5 billion by 2012.

For a company like NPIL that has a history of take-overs, the accent of its recent strategy hinges on "organic growth", a company official told Business Line.

"Local acquisitions in future will not be to grow in size. Rather, they would be to strengthen the company's base in a given therapeutic area. For example, the Rhone Poulenc acquisition in the past helped us grow in size, but the subsequent acquisition of ICI's pharma business and Sarabhai's helped us gain a presence in the cardio-vascular and central nervous system segments, respectively," the official added.

Unlike the past, when McKinsey was appointed to facilitate the restructuring, the recent strategy for growth has been chalked-out internally, the official said.

"The strategy has been drawn up by the second-tier of the management. This was presented to the top management of the company. Discussions followed and now the strategy has been rolled out to all employees," he said.

Unwilling to divulge the sales target, five years ahead - the official said that the strategy looks at company revenues growing at about 18 to 20 per cent.

On of the three lines of business that the company looks to strengthen is that of custom manufacturing. With an eye on exports, NPIL has already entered into several alliances with multinational companies, to value-add and manufacture products locally.

Another driver of revenues would be the company's domestic formulations business, or the sale of medicines in their finished form. "With the integration processes of acquisitions in the past being completed, the aim would be to stabilise and drive revenues from this business," the source said.

Also looming large in the NPIL growth plan is its R&D plans. "With the process of restructuring being completed over the last two years, we are looking to ramp-up on investments in this are," the official said.

NPIL has ear-marked investments to the tune of Rs 200 core to be pumped into R&D, over the years. The company's new R&D centre at Goregaon (Mumbai) is expected to become completely operational by August this year.

More Stories on : Outlook | Pharmaceuticals

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