The Hindu Business Line : Serum Institute to tap US, European markets

Pune, Sept. 28 Vaccine-maker Serum Institute of India Ltd will invest Rs 800-1,000 crore over the next few years in developing new products and setting up plants that meet the quality standards necessary for export to Europe and the US.

Serum Institute, the flagship of the Poonawala group of companies, has also deferred its plans to go public, asserting that an initial public offering is definitely on the cards, but will not happen for another year.

Mr Adar Poonawala, Executive Director, Operations, told Business Line that the investments, which will be done in phases, will come from internal accruals. This includes finishing and filling facilities for vaccines at its Biotech SEZ at Pune that will be commissioned next year. “We were looking at acquiring these facilities abroad, but have decided to install them here. This will help us in registering and exporting to the US and Europe,” he said, adding that while a marketing partner in Europe was already in place, discussions were underway for similar partners in the US.

The institute, whose three business verticals come from vaccines, anti-cancer products and recombinant products, contributing 70 per cent, 15 per cent and 15 per cent respectively to its topline, exports to 140 countries, but does not have western European countries and the US on this list. These markets, which will account for a mere 10 per cent of the institute’s capacity of 900 million doses, will do much to improve the bottomline.

Last month, it launched a pentavalent vaccine, a 5-in-1 protection against hepatitis and Hib (influenza) in addition to the conventional DPT. Over the next two years, it expects to add Rs 300 crore to the Rs 750-crore vaccines generated today, Mr Poonawala said.

It is also launching three new recombinant products —Erythropoitien, GCSF and inter-feron alpha by the middle of 2008.

Listing plans

Referring to Serum Institute’s plans for a stock exchange listing, Mr Poonawala said that though it would go public, the issue was being shelved at present. “Right now we don’t need funds, but we will have an IPO may be in a year’s time,” he said, adding that discussions were on and valuations were underway.

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