‘Raricap acquisition is a dream come true for us'

For several years, Chennai-based Bafna Pharmaceuticals had been producing ‘Raricap', an iron tablet for pregnant women, for the owner of the brand — Johnson & Johnson. Bafna announced last week that it had bought the brand from Johnson & Johnson. The consideration is said to be a little over Rs 20 crore.

The Rs 100-crore Bafna has ambitions to raise its sales to Rs 500 crore by 2012-13. With Raricap, the company breaks into the domestic market — hitherto, it had only been in exports. In a chat with Business Line , the company's Chairman and Managing Director, Mr Mahaveer Chand Bafna, says that more brand acquisitions are on the cards, and that he has lined up investors to fund the buys. Excerpts from the interview:

How did ‘Raricap' brand acquisition happen?

Bafna has been very successful in the global arena — our products go to over 80 countries. We now want to be more visible in India because the Indian prescription drug market is growing leaps and bounds. Our strategy was to shift our business model from core generics and institutional supplies to branded generics and brands.

We had two choices, either to acquire a brand or to create a brand. We opted to acquire a brand, which has good brand equity, and soon after, we got an opportunity to acquire Raricap and we pounced on it.

What does the brand acquisition mean to Bafna Pharma?

Raricap is a well-known brand with a history of 40 years, well-accepted text-book iron drug given to pregnant women. We are confident that through Raricap ‘Bafna' will be a more trusted name in the domestic market. Raricap is a sure-shot entry point for Bafna Pharma to create a unique position in the domestic market in the gynaecology segment, which has been consistently registering a growth of over 15 per cent in the last few years.

Today, Raricap sells Rs 12-crore, but we believe that with renewed marketing thrust, it is worth much more.

This brand acquisition is a dream come true for the Bafna family. Since Raricap is a well-known brand in the medical fraternity we are sure we will make this brand very successful and we will weave our other brands around Raricap.

What do you mean by “renewed marketing thrust”?

We have just recruited 330 territory managers and are putting them through a rigorous training process. The idea is to (re)launch Raricap in Maharashtra, Tamil Nadu, West Bengal, Orissa and Jharkhand in the first phase, and some other states in the next.

Raricap is a well-known brand. All doctors are familiar with it. The task on hand is to put the product back on the shelves in adequate numbers and let the medical fraternity know it is there. Since we are going to call the product Raricap BAFNA, the popularity of Raricap will rub off on Bafna too, which will be of help when we launch other products in the domestic market.

You have said your vision is a turnover of Rs 500 crore?

Our current turnover is Rs 100 crore, all from exports. The export market is growing and the companies for whom we manufacture the drugs are confident is increasing their sales abroad, which means more business for us. Then we have Raricap.

However, we are looking for more inorganic growth. We are looking to acquiring more well-entrenched brands in, for instance, renal therapy. We are discussing with several potential sellers and we will close some deals this year.

With all this, a turnover of Rs 500 crore by 2013 is eminently achievable.

How strong is R&D in your company?

We have 35 persons working in our R&D with 11 products for Europe. We have a basket of 27 products for the emerging markets. The total R&D spend is around Rs 12 crore.

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