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Dishman’s China ops to begin in August

Dishman Chemicals and Pharmaceuticals, the Ahmedabad based drugmaker, is set to begin its China operations in August-September this year.

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Dishman Chemicals and Pharmaceuticals, the Ahmedabad based drugmaker, is set to begin its China operations in August-September this year.

The company, a leading player in the contract research and manufacturing services (Crams) space, is making an organic foray in the international market through the Shanghai facility, which is expected to be complete by August.

VVS Murthy, chief financial officer, said Dishman has invested about $10 million in the China unit. Spread over 40,000 sq m at the Shanghai Chemical Industry Park, the unit will produce quaternary salts and medicine intermediates for international clients.

Murthy said the facility is expected to fetch revenues of $10 million in the first year of operations, and $20-25 million annually thereafter.

Dishman chose China for its first greenfield unit overseas as it imports as much as 20% of its active pharmaceutical ingredients (APIs) from there. “The Shanghai unit will help us reduce the cost of importing raw materials from China,” said Murthy.

The drugmaker is planning to invest about Rs 100 crore in financial year 2009-10 to boost capacities at the Shanghai unit and its oncology facility at Bavla near Ahmedabad. It has invested Rs 60 crore in the Bavla plant.

Bhawana Verma, an analyst from KR Choksey Shares & Securities, said the commercialisation of the Shanghai plant will take the company’s growth forward. “The recent contracts it won from AstraZeneca, Solvay, Takeda for Crams business are also very encouraging and will help the company grow its topline and bottomline by 15-20%,” said Verma.

The Rs 1,062 crore Dishman, which gets over 75% of its revenues from Crams, has clients such as Roche, Novartis, AstraZeneca, Sanofi Aventis, etc. The company expects outsourcing to increase by 10-15% annually.
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