The Hindu Business Line : ‘Cipla has a professional team in place’

Mumbai, Aug. 28 Cipla is in strong hands with a professional management and is not dependant on individuals, the Chairman and Managing Director, Dr Y.K. Hamied, told shareholders, responding to a query on the company’s succession plan.

“We believe in a professional management team,” he said, adding that otherwise it could not have run over 30 factories across the country, and export to 180 countries. For a company of the size of Cipla, no individual matters and “we have a professional team and continue to strengthen the team,” he added.

When queried for his views on Ranbaxy promoters’ sale of controlling stake to Japanese drug-maker Daiichi Sankyo, he said, “Each company has its own individual strategy and model for future growth.”

Conservative approach

Just as no two people are alike, no two companies are alike, he said. The organic growth route is the best for the company and its shareholders, he said. Cipla’s conservative approach to growth and development, and the partnership approach is the right approach for it, he added.

Capex

Outlining the investment plan between 2007 and 2010, Dr Hamied said that the company would spend Rs 2,000 crore in the period. Over Rs 600 crore has been invested in plants in different locations including Sikkim, Patalganga, Kurkumbh and Indore, he said.

The company sits on borrowings of Rs 700 crore, said Mr Amar Lulla, Cipla’s Chief Executive Officer, and the rest of the finances would be raised through internal accruals, he said.

Of Cipla’s Rs 4,200 crore sales, about Rs 2,000 crore comes from exports. In the US alone, Cipla has 17 partners for 118 products.

Goa stand-off

On the stalemate over Cipla’s facility at the Special Economic Zone (SEZ) in Goa, Dr Hamied said that work continues to remain suspended there.

The company was discussing and following up the issue with the Union Commerce Ministry to end the stalemate.

About Rs 130 crore has been invested in the location, he said, excluding the cost of over-runs due to the delay.

Work on products that initially were to be made at the Goa site has been shifted to Indore, he said.

No claims for damages have been made against Cipla by its vendors and suppliers, he added.

Appeal to Centre

With the Tatas facing protests from local people at Singur in West Bengal and other corporates too facing similar problems with land allotted to them, the Centre needs to come out and make a statement, he told Business Line.

Cipla shares were marginally up at Rs 239.30 on the BSE.

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