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Animal vaccine maker, Hester Biosciences Ltd, on Monday informed that the board of directors has approved setting up of an animal vaccine manufacturing unit in Tanzania to cater to the African market.
The project, which will cost approx $18 million, will have a capacity to produce 1.5 billion doses of vaccines every year. Estimated revenue from the project is $ 30 million per year at full capacity.
Hester will have equity share capital of $4 million, while it has received secured loan and grants commitment worth $14 million from Bill & Melinda Gates Foundation, US.
According to Rajiv Gandhi, Managing Director, Hester Biosciences, there is big potential for animal vaccine business in Africa as 80 per cent of the vaccines required in the African market are imported.
"Besides the common diseases, there are Africa-specific diseases, which currently remain unaddressed, thereby causing economical losses to poultry and livestock farmers. The project would mainly manufacture vaccines against Africa-specific diseases, besides having the capability as well as the capacity to manufacture a bigger range of vaccines against other commonly occurring animal diseases," Gandhi said.
The construction is scheduled to be completed by January 2020, while the first commercial batch will be produced by November 2020.
Distribution network
Hester is also setting up a distribution network in Africa, which will service the backyard farmers as well as the organised poultry and livestock farmers.
The board of directors has also approved the new wholly-owned entity named Hester Biosciences Africa Ltd as an export-oriented unit registered under the Companies Act 2002 of Tanzania.
Financial results
Hester had registered 27 per cent growth in net profit at Rs 9 crore on net sales of Rs 37 crore for the fourth quarter ended March 2018. For the financial year 2018, the company's net profit stood at Rs 31 crore, up 23 per cent on net sales of Rs 135 crore.
Earnings per share (EPS) increased by 27 per cent to Rs 10.59 for the quarter and Rs 35.92 for the fiscal. The board of directors has recommended a final dividend of Rs 6 per equity share of Rs 10 each (or 60 per cent) for the financial year 2017-18.
Hester Biosciences shares ended down by 7.5 per cent at Rs 1,500 on Monday.
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