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‘Aurobindo
goes global to grow’
 K
Nityananda Reddy, promoter and managing director of Aurobindo
Pharma Ltd, is versatile in the field of manufacturing technology.
He supervises the overall affairs of Aurobindo. In order to become
a force to reckon with, one needs to make huge investments in infrastructure,
manufacturing, marketing and R&D and also put together an excellent
team comprising talent in all these areas, says Reddy in an interview
with P Ram Kumar. Excerpts:
How
is the pharma industry fairing in Andhra Pradesh with reference
to the performance, growth, etc?
The
pharma industry is doing well in Andhra Pradesh and several established
companies have shown good performance.
During
the last couple of years, very few players have entered the pharma
sector in the state. What are the reasons for this?
There
lies an enormous scope for the industry not only in the state, but
also in the country. However, the rules of the game have changed
dramatically. In order to become a force to reckon with, one needs
to make huge investments in infrastructure, manufacturing, marketing
and R&D and also put together an excellent team pooling talent
from all these areas.
That
is not easy and hence, the entry barriers have become quite high.
As a result, fewer players are entering the pharma sector.
Of
late, there has been very few mergers & acquisitions taking
place. Has the phase of consolidation ended in this industry?
The
consolidation phase in the pharma industry is likely to continue
for quite some time. The Indian pharma industry is very fragmented
with no player having more than seven per cent market share and
I believe that as companies seek economies of scale to pursue their
research and marketing goals, the industry will witness more consolidations.
What
are the major problems faced by the bulk drug and formulation segments
in India?
One
of the major problems both the bulk drugs and formulations segments
are facing in India is the lack of global size and quality. Except
the large players, most bulk drugs and formulation players are saddled
with low capacity units and poor manufacturing and quality infrastructure.
What
are Aurobindo’s specific strategies to enter regulated markets?
We
have drawn up aggressive growth plans for the company. Our thrust
is going to be largely two-fold:
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Further penetrate and capture larger shares in the markets of
India as well as South East Asia and Latin America through subsidiaries,
joint ventures and alliances.
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Enter regulated markets on the strength of our R&D engine.
We have made significant progress towards achieving both these
objectives. Our investments in India, China and Brazil are producing
excellent results. Our strong R&D is widening our therapy
areas. The restructuring of our manufacturing facilities is almost
complete and our two mega bulk units and three formulation facilities
have been built to meet the demands of both the semi-regulated
and the regulated markets.
What
are Aurobindo’s plans in the area of biotechnology?
Biotechnology
is a promising industry. However, we do not have any immediate plans
to get into this segment.
What
are the strengths of Aurobindo?
Aurobindo’s
strengths are considerable ranging from strong R&D to mega world-class
manufacturing facilities for bulk actives and formulations, products
covering a wide therapeutic range, and a strong presence in global
market. In the area of R&D, a Rs 25-crore centre has been built
where 80 top scientists are working. In manufacturing, the company
has two state-of-the-art mega bulk units and three formulation facilities.
In our endeavour to become a truly global company, two plants have
been set up in China and a subsidiary in Brazil.
In
addition, a joint venture is being set up in the US to make sterile
and non-sterile cephalosporins. In terms of size, Aurobindo has
crossed the Rs 1,000 crore turnover mark with exports of Rs 575
crore. In fact, we are the fourth largest semi-synthetic penicillin
manufacturer in the world and poised to become the second largest
in a year’s time. We have Asia’s largest sterile facilities,
and are the second largest cephalosporin manufacturers in the world.
In
our goal to become an international player of significance in the
pharma industry, it will be important for us to have marketing and
manufacturing presence in several countries. I think that we have
made a very good beginning and with this experience, we shall be
able to become a major force in the global market in a very short
period.
What
are the future prospects for the pharma industry in India in the
context of expiry of patents?
The
future prospects for the Indian pharma industry is extremely bright.
We have a very large pool of talent and strong technological capacities.
Many companies have already started preparing for the post 2005
regime and will do well in the emerging scenario.
How
did you plan to enter the anti-HIV drugs segment in India? Are you
exporting these drugs?
The
menace of HIV is known to everyone. Hence, there is a huge demand
for economic anti-HIV drugs from many countries. There is a big
opportunity that exists in this segment and as such, we entered
this segment. Aurobindo has been continuously enhancing its portfolio
of drugs in this segment. Imunus Aurobindo, our division that markets
anti-HIV drugs is a pivotal player in making therapeutic options
available at affordable prices for successful management of HIV.
Recently, the division announced reduction of 30 per cent and with
this, the per day cost of the globally accepted latest triple drug
regimen (Stavudine + Lamivudine + Nevirapine) is just Rs 50. We
are selling anti-HIV drugs, both in India and abroad.
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