The Hindu Business Line : Hikal to focus more on research — Keen to cash in on huge global opportunities

`R&D is a $6-billion opportunity globally and is a very big thrust area for us, especially in chemicals. We want to build the R&D capacity in a big way.'

Bangalore , Feb. 8

HIKAL Ltd has said that it is increasing its focus on R&D, mainly contract research and partly in-house development, so much so that in its research roadmap the next acquisition could be one of the many small R&D companies in the US, according to top Hikal officials.

The Mumbai-based API and contract manufacturing player is keen to cash in on the huge opportunity in global contract research and expects to get 15-20 per cent of its turnover from this stream within 3-5 years.

At least three overseas companies are in talks to outsource their research to Hikal.

The spur to this plan will be the research facility coming up by this year-end at Pune at a cost of Rs 25-50 crore, Mr Jai Hiremath, Vice-Chairman and Managing Director, told newspersons.

"R&D is a $6-billion opportunity globally and is a very big thrust area for us, especially in chemicals. We want to build the R&D capacity in a big way."

Hikal's interest, he said, was in the growing chemistry research market, which is expected to touch $2.17 billion in 2007.

Hikal will segregate work at its two R&D centres; it will keep in-house research at Bangalore and shift all contracted work to the Pune centre, Mr Hiremath said after a meeting with the year-old scientific advisory board of the company.

The coming years will see Hikal shift focus from manufacturing to development research, according to Mr Sameer Hiremath, Executive Director.

The 1.4 lakh sq ft Pune centre will house 28 labs and 250 scientists. It will support innovator companies in the discovery of new molecules, development of non-infringing processes, and custom synthesis of key intermediate and active molecules and analysis.

Academic linkages are being built with IISc and National Centre for Biological Sciences, both in Bangalore.

The SAB includes former IISc Director, Dr Goverdhan Mehta, who is now President of International Union of Pure & Applied Chemistry; Prof Andrea Vassela of University of Zurich; and Dr Helmut Rupp, former CEO and head of Hoechst's corporate research and technology unit.

The company also plans to invest Rs 100 crore in the expansion of all its production sites at Taloja, Mahad, Panoli, and Bangalore, and its German subsidiary.

In Bangalore, it will invest Rs 20 crore in a small-volume, high-potency steroid facility to be set up in six months.

A few months back, it issued $25 million worth of foreign currency convertible bonds and convertible preference shares for expansion and global acquisitions.

The Rs 350-crore Hikal group's presence in agrochemical and pharma APIs is currently 70:30. This mix would be reversed.

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