The Hindu Business Line : Ranbaxy: Milestones

Ranbaxy’s original promoters, Ranjit Singh and Gurbax Singh, got together to form Ranbaxy & Co. with the aim of taking up the distribution of medicines in the country on behalf of foreign pharma firms. In the early 1950s, Gurbax Singh sought additional financing and turned to a local moneylender, Bhai Mohan Singh. In due course, Gurbax Singh had built up huge debts to Bhai Mohan Singh. When Bhai Mohan Singh came to collect, Gurbax offered to turn over their company to him instead. Bhai Mohan Singh agreed to the deal and on August 1, 1952, he became promoter of Ranbaxy & Co.

Sleeping pill helps Ranbaxy hit pay dirt

In the 1960s, when the India’s pharmaceutical market was largely dominated by foreign drug makers, Ranbaxy tied-up with an Italian pharmaceutical company Lepetit SpA and began production in 1962. Ranbaxy’s upside came in 1970, when the Government passed legislation that effectively ended patent protection. Ranbaxy struck pay dirt early on, when it launched Calmpose, a generic formulation of the hugely popular Roche drug Valium. Released in 1969, Calmpose immediately placed Ranbaxy on India’s pharma map. The company expanded quickly, and by 1973, Ranbaxy opened a new factory, in Mohali, for the production of active principal ingredients (APIs). This facility enabled the company to expand its range of generic medications and ingredients. To finance its growth, the company listed on the stock exchange that year.

Kicking off global ambitions

Ranbaxy’s ability to produce generic medications at far lower cost than its branded competitors enabled it to expand internationally, especially in less developed markets. It launched a joint venture in Nigeria and opened a production facility in Lagos in 1977. In 1987, the company became India’s leading antibiotic and antibacterial producer when it completed a new plant in Toansa, Punjab. In 1988, the Toansa plant received US Food and Drug Administration (FDA) approval and by 1990, the company was granted an US patent for its doxycycline antibiotic preparation. The following year, the company bagged an US patent for its cephalosporin preparations, and the company built a new facility for their production in Mohali. A big milestone for the company was recorded in 1992, when it reached a marketing agreement with Eli Lilly & Co. The companies set up a joint venture in India to produce and market Lilly’s branded pharmaceuticals for the domestic market while Lilly agreed to begin marketing Ranbaxy’s generic medications in the US. Ranbaxy, thereby, gained access into the world’s single largest drugs market.

Boardroom coup ousts Bhai Mohan

In the late 1980s, in a family settlement Bhai Mohan Singh split the businesses between his three sons. The eldest son, and Bhai Mohan Singh’s favourite, Dr Parvinder Singh and his family got control over Ranbaxy. Subsequently, however, the relationship between Bhai Mohan Singh and Dr Singh soured on differences over Ranbaxy’s growth strategy. Dr Singh took over at the helm of the company in 1992, ousting his father in what was seen as a messy family feud. By then, Ranbaxy had grown into one of India’s largest pharmaceutical companies on the basis of its generics production. Under Dr Singh, Ranbaxy adopted a new corporate mission in 1993 to announce its reformulated ambitions: “To become a research-based international company.”

Outsiders step in

D.S. Brar

Dr Parvinder Singh died in 1999 and his right-hand man Mr D.S. Brar took over as company leader. Mr Brar, on taking over, named family outsider Brian Tempest as company President. The new management team continued Dr Singh’s expansion strategy, opening a new manufacturing plant in Vietnam in 2001. Ranbaxy also sought new alliances, and in 2003 the company reached a global drug discovery and development partnership with GlaxoSmithKline. The company’s international expansion also took a major step forward at the end of 2002, when it agreed to acquire RPG (Aventis) in France. Ranbaxy’s sales had by then topped the $1 billion mark

Family back at the helm

Brian Tempest

In December 2003, Mr Brar, CEO and Managing Director, announced his decision to resign from his post. Mr Brar was to complete his tenure in July 2004. He named Dr Brian Tempest (President, Pharmaceutical Division, Ranbaxy) as his successor. Mr Brar’s exit from the company was attributed to strained relationships between Ranbaxy’s professional managers and the promoter family. Subsequently, in early 2006, after an interval of seven years, the promoter family re-took control at the helm of Ranbaxy, with Dr Parvinder Singh’s son, Malvinder Singh, donning the mantle of CEO and MD.

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