The Hindu Business Line : Cipla plans Rs 950-cr capacity expansion

Mumbai, Aug 24 Cipla is set to undertake a Rs 950-crore capacity expansion over the next two years, Chairman and Managing Director Dr Y.K. Hamied told shareholders.

The investments will be made in three formulations facilities at Sikkim, Goa and Indore that would make the finished forms of medicine.

About Rs 180 crore will be invested in a tablet and injectible facility in Sikkim, Rs 400 crore will go towards the Goa plant that would make aerosols, capsules and tablets, while Indore will involve an investment of Rs 350 crore and will make form-filled sealed units, among others.

The company has, in the last two years, invested about Rs 800 crore in capacity expansion, he said.

The Mumbai-based drug maker has about 30-odd plants across the country, a company official said.

Cipla is also looking to raise $100 million in foreign currency loan to off-set the impact of the strong rupee, he added.

The company would take a Rs 200-crore hit on exports of about Rs 2,000 crore because of the appreciating rupee, according to him.

The Rs 3,500-crore company projects 10-12 per cent growth in the current fiscal, though profits could be lower when compared to the previous year, he indicated.

The official admitted that the company was “viewing with interest” niche business segments for acquisitions, not merely to increase sales but to enhance value by entering new business segments like bio-technology, for instance.

The company has, in the current year, received Rs 48 crore for technical knowhow that it has shared with companies and the payment has come on completion of milestones.

However, the official denied any tie-up with GlaxoSmithKline on inhalers.

Cipla has eight HFA inhalers, of which two have got approval in the European Union and details of the rest have been submitted, he said.

CFC-free inhalers from Cipla have got approval in Denmark and Portugal and approvals are expected in the UK and Spain this year.

Responding to queries whether Cipla and Reliance were in acquisition-related talks, Dr Hamied told Business Line: “The answer is No. I have not met anyone, I have not talked to anyone.”

Earlier, he told shareholders that there was no sourcing tie-up with Reliance for the retail sale of medicines.

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