Dishman Pharmaceuticals and Chemicals, API intermediates and quaternary compounds, is readying for its first international foray.
API maker eyes $20-25 million from its first overseas facility by 2011
MUMBAI: Dishman Pharmaceuticals and Chemicals, an Ahmedabad-based manufacturer of active pharmaceutical ingredients (APIs), API intermediates and quaternary compounds, is readying for its first international foray through the organic route.
Chief financial officer VVS Murthy said the company has invested $10 million to set up a facility in Shanghai, China. The unit is scheduled to begin operations in the third quarter of 2008-09. “We expect the Shanghai facility to fetch revenues of over $10 million in financial year 09-10,” Murthy told DNA Money. The company hopes to double this to $20-25 million in 2010-11.
Spread over an area of 40,000 sq m at the Shanghai Chemical Industry Park, the facility has the capacity to produce 3000 metric tonne (mt) of quaternary salts and 500 mt of medicine intermediates. It is Dishman’s first greenfield facility overseas.
The unit would cater to the $1.7-billion contract research and manufacturing services (CRAMS) market, in which Dishman is a key player with clients like AstraZeneca, GlaxoSmithKline and Merck. Dishman’s CRAMS business contributes Rs 601 crore to its revenue.
Dishman’s expectations, however, may be a bit too high from this unit, felt IIFL analyst Bino Pathiparampil. He said that the Shanghai plant won’t fetch any significant revenue immediately but would help get CRAMS customers who “don’t traditionally view India as a market”.
The company is growing at over 30% annually, and the Shanghai plant is expected to boost this growth further. Murthy said the overseas facility was set up for risk mitigation as all its domestic facilities are in Gujarat—two in Naroda and eight in Bavla. “It’s not a good idea to have all facilities concentrated in one area. We can mitigate any risks that could come up in the future through a facility at a slightly far-off location,” Murthy said.
China was chosen as Dishman imports 20% of its API raw material from there. “The Shanghai facility can help us reduce the cost of importing raw material from China,” he said.
Dishman had acquired Swiss research firm Carbogen Amcis in August 2006. With three facilities in Switzerland, Carbogen posted revenues of Rs 225 crore in FY07, said figures provided by securities firm Anand Rathi.
Dishman has been expanding domestically too. It recently commissioned three API facilities in Bavla at a cost of Rs 150 crore.
g_priyanka@dnaindia.net
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