C.R. Sukumar

Hyderabad, Feb. 23

SAMI Labs Ltd (SLL), the Bangalore-based Rs 250-crore nutraceuticals company, has firmed up a short-term business plan of reaching Rs 450-crore turnover by next year-end and a long-term plan of attaining Rs 2,000-crore turnover in the next five years.

The company plans to upgrade the existing manufacturing facilities, set up two phytochemical extraction units in Andhra Pradesh, each at a cost of Rs 10-12 crore, and one dosage form in Karnataka.

SLL is in the process of building a worldwide core marketing team for introducing its branded products through multi-level marketing (MLM) model. It has lined up many nutraceutical and cosmeceutical products under the brand `Johar'.

The SLL Managing Director, Dr Muhammed Majeed, told Business Line that plans were to raise funds through an initial public offering mid next year to part finance the capital expenditure programmes.

Before that, the company may privately place equity with institutional players. Ernst & Young was appointed to negotiate with a few institutional investors for the purpose. A decision on the issue would be taken in the next couple of months, he said.

SLL has four manufacturing facilities in Karnataka and subsidiaries in the US, Japan, South Africa and Dubai.

"We have been registering a growth of 40-45 per cent in business volumes per annum for the last few years. We need to add at least 200 per cent more manufacturing facilities to what we have now to meet the expanding demand for our products," Dr Majeed said.

The company is spending 8-10 per cent of its revenues on R&D. It has obtained 19 patents and 20 were in the pipeline, Dr Majeed said. It has also initiated clinical trials on some of its existing products, to tap a part of the nutraceutical market in Japan, the US and Europe.

According to Dr Majeed, the company has initiated negotiations with the Andhra Pradesh Industries Department and the AP Industrial Infrastructure Development Corporation for setting up manufacturing facilities in the State.

(This article was published in the Business Line print edition dated February 24, 2005)
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