Vivimed Labs hopes to cash in on Uquifa buy to double turnover to Rs 1,000 cr

G. Naga Sridhar
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Mr Santosh Varalwar
Mr Santosh Varalwar

Vivimed Labs Ltd is hoping to cash in on the global market potential for formulations post its acquisition of Spain-based active pharmaceutical ingredients maker, Uquifa, early this month.

“Uquifa's active pharmaceutical ingredients' capacity will complement our formulations business with cost competitiveness besides making us a full-fledged pharma company,” Mr Santosh Varalwar, Managing Director, Vivimed Labs, told Business Line here.

The Hyderabad-based company would go for backward integration by shifting Uquifa's pharma ingredients production to India.

“Our API facilities coming up at pharma special economic zone at Visakhaptanam and Bidar in Karnataka will help us in this,” Mr Varalwar said.

Another plant to make finished dosages is also being set up exclusively for regulated markets at Choutuppal near here. “The combined investment in these plants is about Rs 190 crore. All of them should begin production by end of next financial year,” he said.

The pharma business was moving towards finished dosages for sustainable growth, he added.

On the rationale behind acquiring Uquifa for $55 million which was more than half of the present turnover of Vivimed, Mr Varalwar said the deal was one of the ‘cheapest' transactions in the recent past.

Vivimed paid only $55 million and got deferred payment for three years for $10. “We borrowed only $25 million at about 5 per cent interest. This got us $100 million gross assets and $65 million net assets,'' he said.

The turnover of the company would zoom to Rs 1,000 crore by end of next financial year with an equal share of specialty chemicals and pharmaceuticals in revenue, he added.

The operations of Uquifa which are now in the UK and Spain would be rationalised by bringing everything to Spain.

The scrip of Vivimed decreased 0.18 per cent to end at Rs 225. 25 on the Bombay Stock Exchange on Tuesday.

Vivimed had a turnover of Rs 416 crore in the financial year 2010-11 and posted a net profit of Rs 49 crore.

(This article was published on December 13, 2011)
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