CHENNAI: Realising the need the to have a plant approved by the Unitied States Food and Drug Administration (USFDA), in order to survive and thrive in the post-2005 markets the Rs 84 crore turnover Arvind Remedies has decided to build a new plant near Chennai, spending Rs 50 crore
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Says Arvind Remedies managing director and CEO Arvind Shah: "We are planning to manufacture soft gelatin, anti-oxidants, food supplements and tablets at the proposed plant for the American and European markets. At this stage a new plant is a necessity, as it is difficult to relay and upgrade the company's existing plant at Kakkalur, also near Chennai." The plant was expanded in phases, based on the need; it still awaits ISO 9002 certification.

The company is negotiating for finances with banks and financial institutions for the purpose. "For the next three years we might require around Rs 100 crore -for the new plant and other usual activities. We are looking at a mix of debt and equity for raising that sum," says Arvind Remedies chief financial officer R Karthikcyan. Arvind Remedies had raised Rs 14.86 crore a year ago through a rights issue to meet the company's expansion and new product launch plans. Karthikeyan says the company will finalise all its plans in a month's time.

" A USFDA-approved plant, apart from manufacturing and exporting our own products, will help in contract manufacturing for multi-national pharma companies, who inted to enter the domestic market after 2005. Such companies will focus only on marketing and brand-building activities," says Shah.

Incidentally, contract manufacturing is not a new concept for the company. Currently, the company is utilising its capacities by manufacturing some products for TTK Healthcare and for a Bangalore-based pharma company.
While the expansion plans are for the future, Arvind Remedies, which enjoys a unique position by manufacturing both ayurvedic and allopathic medicines under one roof, is planning to launch a slew of new products. Currently, Arvind Remedies manufactures vitamin, antibiotics, anti-inflatmmatory products -branded and generics -in all forms except injectibles. A segment-wise sizeable turnover is generated from selling vitamins, anti-bactcria, anti- TB, anti-malarial, anti-innammatory, anti-allergic and anti-depression drugs.

The first of the new ayurvedic drugs launched is the diabetic drug Pankare. ”This is a unique product, the result of combining nine sanjeevinis, offering restortion and regeneration of pancreatic beta cells” says Shah, The other new brands are Sorexil for bedsores, Artin for rheumatoid arthritis, Azathinean, an immuno suppressant; Mercapthol for blood cancer. In the pileline are cardiovascular and fatreduction drugs.

In respect of allopathic drugs Shah says his company will introduce new products in the gynecology, pain management, nutrition and dermatology areas.
On the marketing side the company has around 250 medical representatives to detail doctors. The company's major strength- institutional sales -is its weakness as well. A major share of Arvind Remedies turnover comes from central and state governments, defence, railways and World Bank-assisted projects. But Shah declines to share his clients' segment-wise sales figures.
While institutional sales give an assured revenue, while taking care of the capacity utilisation worries, the problem is the low margins and delayed payments, resulting in an increase in working-capital needs.
It is to avoid this issue that Arvind Remedies is planning to step up its presence in over- the-counter market, where margins are higher; it also plans to introduce new branded products. As a short-term marketing strategy Shah hopes to consolidate the gains made till the next fiscal. He also hopes to grow the company by 45 per cent by increasing the doctor coverage by 38 per cent.

"By 2003-04 we will have two robust business units in ethicaJ marketing -allopathic and ayurvedic specialities -and the year after that we will have a new business unit with a novel nutritional product range," says Shah. Hoping to close this fiscal with a turnover of Rs 101 crore and a profit after tax of Rs 4.10 crore, Shah has projected a sales figure of Rs 137 crore for the next fiscal and an after-tax profit of Rs 6.67 crore.