RPG Life Sciences formulates growth plan

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Shifts focus to specialised categories.

Mr A.S. Chouhan, Managing Director, RPG Life Sciences Ltd.
Mr A.S. Chouhan, Managing Director, RPG Life Sciences Ltd.

P.T.Jyothi Datta

Mumbai, July 12

For the estimated Rs 16,000 crore RPG Group, with presence in diverse businesses, how important is its Rs 163-crore pharmaceutical and life-sciences business?

The opportunity is there, and the Group is committed to growing the business “strongly and smartly”, responds Mr A.S. Chouhan, the recently appointed Managing Director of RPG Life Sciences.

A late starter of sorts, the 43-year-old RPGLS recently undertook a restructuring exercise to streamline its operations, making the shift from a generalised approach to focussing on “specialised services to doctors and patients,” he told Business Line.

RPGLS is looking to put more “feet on the street” by increasing its promotional staff to about 500 people by year-end, even as it strengthens its domestic and global formulations businesses, he said.

Domestic growth

With the domestic formulations (finished medicine forms) business growing from Rs 66 crore to 84 crore, up to Rs 100 crore over the last two years, RPGLS is looking to roll out several products in oncology and neuro-psychiatry, recently created categories.

This month will see five new products from the oncology division, NeoLife, and four new products from Empathy, its neuro-psychiatry division.

The market for oncology drugs is estimated at Rs 1,200 crore, growing at 27 per cent, while the central nervous system segment is estimated at Rs 2,373 crore, growing at 21 per cent.

RPGLS is also exploring the cardio-vascular segment, he added.

But with medicines also being about patients who consume them, RPGLS is looking at having support services in both categories, where patient databases would be maintained and support would be offered to the families, he said, outlining the company's road ahead.

The company is also looking at taking its generic products into semi-regulated markets such as Africa, Vietnam and CIS, even as it strengthens its immuno-suppresant product portfolio in the European market.

Plans are afoot to enter Germany later this year. Expanding geographies and the product-basket would be supported through the company's active pharmaceutical ingredients plant at Thane and formulations plant in Ankleshwar, Gujarat.

Having invested about Rs 25 crore in the past in manufacturing, future expansion would require about Rs 60 crore, he indicated.

The funds would come through internal accruals and there has been equity infusion by the promoters who will hold about 51 per cent in the company after the complete conversion of warrants, he said.

Looking ahead, acquisitions are not on the cards, as the company does not have the critical size.

But, since businesses “cannot operate in isolation” RPGLS seeks to grow the business organically, through forging alliances with partners to market products overseas, or sell in India, he explained.

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RPG’s revamped pharma business may list by April

(This article was published in the Business Line print edition dated July 13, 2010)
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