Sami-Sabinsa Group Limited, a nutraceutical company, will be building two additional manufacturing units with an investment of ₹300 crore in Hassan, Karnataka, within a year. The company expects to strengthen its position in the Indian and overseas markets with additional production capacities.
“Our first facility would be operational within three months; the other is scheduled before we close the FY23. The objective is to enhance our production capacity in the nutritional fine chemicals and herbal extract segments. The two units together have a production capacity of producing 50 tonnes of ingredients per month,” said Muhammed Majeed, Founder and Chairman, Sami-Sabinsa Group.
Although the company’s herbal extract product line contributes up to 60 per cent to the overall revenue of ₹1200 crore it clocked in FY22, Majeed believes that the nutritional fine chemical segment is expected to register growth in the coming years. “Going forward, the fine chemicals will take a major leap because we have new capacity coming up now.” Currently, nutritional fine chemicals contribute about 10 per cent to the company’s annual revenue. The other two product lines include probiotics (20 per cent) and cosmeceuticals (10 per cent).
While there are no new product launches scheduled for this year, the company has other plans. Majeed said, “There are 300 patents in the pipeline. Every patent is a product and we launch new products every alternate year.” The nutraceutical player has 380 patents on its name.
Sami Sabinsa is an export-oriented company with 95 per cent of its business coming from exports. However, the Indian market is essential as it has more volume. “The Indian market is highly price-sensitive, so here the products are priced at just one-sixth of the US price. India offers much bigger volumes,” Majeed added.
The company said it expects revenue to increase by at least 20 per cent in the FY23. The company has a headcount of 1200 employees across its six facilities and plans to add 300 people more by end of FY23.
Launching its IPO
Sami-Sabsina is also examining a initial public offering (IPO). “Within two years the company will launch its initial public offering (IPO), post which we would proceed with our acquisition plans,” he added, stating, “in the last 34 years, the company has established itself organically and feels market-based acquisition to be the key to moving forward.”
The prospective companies being examined by Sami-Sabinsa for acquisition would be in the areas of manufacturing and marketing with shelf space across the globe. “The money raised from the IPO will go into acquisition and we will look for a company that has a manufacturing and market space in Europe, the US, and Dubai,” said the founder.
The Sami-Sabinsa group’s manufacturing facilities are located in Bengaluru, Hyderabad, and Utah (USA). It has a global footprint with a presence in the US, Australia, Brazil, Canada, China, Germany, India, Japan, South Africa, South Korea, and several more.