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| Edited By: Priyanka Golikeri |Source: DNA |Updated: Mar 29, 2018, 06:06 AM IST
Dishman Chemicals and Pharmaceuticals is looking at expanding to key markets such as US and Japan where it has negligible direct presence. VVS Murthy, chief financial officer, said, Dishman is eyeing contracts in the US market which most probably will materialise in the financial year 2010-11.
The pharma firm entered Japan last month and according to Murthy, the revenues from that market would be about $5-10 million this fiscal. “Both US and Japan would be mainly for Crams as that is our main business,” he said.
Crams (contract research and manufacturing services) refers to the outsourcing of manufacturing and research services by multinational pharma companies. The Ahmedabad based mid-sized company currently gets its major business from the European Union (EU).
About 75% of Dishman’s present turnover of Rs 1,062 crore comes from Crams, and it lists innovator firms in EU like Roche, Novartis, AstraZeneca, Sanofi Aventis as its clients.
Murthy said that the mild slowdown in the Crams market due to inventory rationalisation by the innovator companies is over. “We are likely to see a 15% growth this year.”
Crams helps MNCs in cutting costs of research and manufacturing of active pharmaceutical ingredients (API) and finished dosages (formulations) by 30-50% through outsourcing to India due to the availability of cheap labour here.
According to research analyst Bhavin Shah of Dolat Capital Market, Dishman has benefited by mainly catering to innovator pharma companies, rather than generic firms. “As Dishman mainly have innovators as clients, the orders are not short term and it can keep supplying till the product gets exposed to generic competition. This gives it a higher revenue visibility.”
Also, Dishman expects its Shanghai facility, which is its first organic foray in the international market, to be completed by October. This facility is expected to fetch revenues of $10 million in the first year of operations, and $20-25 million annually thereafter, Murthy said.
Dishman has invested about $10 million in the unit spread over 40,000 square metres at the Shanghai Chemical Industry Park. The facility will produce quaternary salts and medicine intermediates for international clients.
