The Hindu Business Line : Alkem Labs sees potential in health foods segment

Mumbai, Aug. 30 A healthy basket of sugar-free cookies, jellies and fat-free oils are just some of the products on Alkem Laboratories’ 80-year-plus Chairman, Mr Samprada Singh’s plate. He has set an aggressive target of doubling the company’s Rs 1,000-crore turnover in three years, i.e. to clock Rs 2,000 crore by 2010. And Alkem’s latest business, the health-food segment, he expects will contribute about 25 per cent of the projected revenues.

The increased focus on health foods, though, will not dilute the company’s focus on the pharmaceutical segment, he told Business Line. In fact, the domestic pharmaceutical segment will continue to be the main-stay, even as exp orts grow simultaneously to 25 per cent of the projected target, he said. At present, exports contribute about 10 per cent of revenues.

Despite Alkem’s robust growth at 20 to 25 per cent, he points out, the environment of price-control on medicines puts tremendous pressure on companies. Companies are faced with an indirect price control, in that they cannot increase prices more than 10 per cent, he said and added that the environment becomes difficult as input costs were on the rise. Alkem’s product portfolio has antibiotics like the Rs 100 crore-brand Taxim and Rs 75 crore Taxim-O. The company is also getting into the life-style segment including therapeutic areas like cardiovascular illnesses, diabetes, psychiatry etc. Alkem is present in preventive oncology as well, and has launched products like the cytobrush used in pap-smears.

The company expects to spend about Rs 30 crore on its research centers in Taloja, Maharashtra and in Bangalore, developing among other things new drug delivery systems. The company has over 200 scientists at the two research centers. With eight manufacturing centers, Alkem has invested about Rs 60 crore in it’s Baddi plant in Himachal Pradesh and about Rs 40 crore in it’s Sikkim plant, he said. More investments were on the cards, he indicated.

Funds required for the expansion and acquisition plans that Alkem harbours in the domestic and overseas markets would be generated internally, he said. He denied that Alkem was planning to tap the capital market to raise funds. Alkem is evaluating acquisition targets, of between $15 and $20 million, in the US, Europe and Latin American markets. Domestic targets are also being screened, a company official said.

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