Spotlight

Standing Tall

Rising from the ashes of Core Healthcare, Claris Lifesciences focussed on parenterals and injectibles and adopted a business strategy, which enabled them to stand tall in the pharma and biotech industry. Arshiya Khan tracks the journey

Claris Lifesciences was born after Core healthcare, its former avatar was takenover by Nirma, following its sickness.

Not put down by this failure, Arjun Handa, Chief Operating Officer (COO), Claris Lifesciences looked at the same segment but at more top of the line products and a robust business model. "The business model adopted in IntraVenous (IV) fluids segment is a number game, a volume-based game," clarifies Handa. "Claris manufactures products, which are top of the line and very difficult to manufacture and the manufacturing capability as well as the marketing capability is of a totally separate and of different nature altogether," he adds.

Reasons for focusing on the similar segment are many. Firstly, it is the belief of the COO that there are not many companies in the category. Hence, this niche market and fewer players, coupled with the company's cost-competitiveness have always kept Claris Lifesciences ahead of its European competition. Secondly, this segment offers Claris an opportunity to manufacture vaccines too. "As we are an injectibles company for us to migrate towards manufacturing vaccines, steroids and biotechnology relatively is much easier because we handle those technologies, products formulations and R&D," explains Handa. The reasons may be many, yet the transformation from Core to Claris was not an easy one.

Problems and Solutions

After Core was termed sick, it was to build another strong base. There were indeed many a roadblocks that attempted to slow down Claris's inception and growth. One major speed breaker came in the form of capital. However the problem was solved through investments from their other trading wing and internal accruals. Armed with the necessary capital, in the year 2000, the company set up a sterile injectibles facility at Ahmedabad, and since then Claris Lifesciences has been expanding its network by setting up newer plants.

In addition to the initial hiccups, the company had to face entry barriers too. Being a knowledge-based segment, the recruitment of employees was a challenging task and acted as a major barrier. The management of the facility also required utmost care, as it was a critical care segment. "A little error in the functioning and management could turn the whole facility upside down affecting the production," says Handa. With a view to leave no stone unturned, the management of Claris decided to implement capsule (short-term) training courses after recruiting people. These courses provided training to new employees in the areas of new product development, regulatory affairs, selling techniques etc.

This strategy worked for Claris, and the training programmes have made the employees more competitive and informed, thereby providing an edge over others in the industry. The work force, which is recruited and trained in India, is then sent to different countries. The company has about 80 employees from India who are working abroad. These people lead, manage and control the offices across the world. The huge number of sales force has also enabled them to provide after sales service, which has enabled the company to sustain itself in the long-standing nature of the market.

This employee strategy has also helped the company to counter the problem of high attrition rates as today Claris has more than a thousand employees across the globe. "Anyone who stays in Claris for more than three years is bound to stick for another ten years," beams Handa. "We also have the lowest attrition rates which is 17 percent compared to 23–30 percent of the industry. Moreover the upper management has still a lesser percentage of attrition which is between three to four percent. With the company's HR paradigm in place, the company has been able to resolve all kinds of problems whether it is sales or people," he informs. With such low attrition rate, the company has expanded it product portfolio and distribution network and is marching across the globe to make its presence felt.

Travelling globally

The Indian pharma market provides opportunities and is dynamic in nature, with many MNCs eyeing the Indian market. Hence, it is difficult to imagine an Indian company not foraying in the international arena. With global aspirations firmly on the agenda, Claris focussed on exports as a step towards realising the international dreams. Today Claris exports in more than 80 countries globally. At the same time the company has maintained a balance of revenues, which comes in a 50:50 ratio from global as well as sales in India.

Given its presence in several countries, Claris has adopted different business models for different countries. "If you have two models in the same country then that is a problem. But once you are selling in two different countries, you are selling it through a marketing partner or a distribution channel. Hence, it does not become a problem," opines Handa.

The results

A direct result of all the smart strategies implemented by Claris, is the fact that the company is growing by leaps and bounds. "The company has been growing at a CAGR of 44 percent. This comes through the continuous setting of plants and facilities and the growing distribution network and international sales that have shown a growth of 60 percent contributing to 20 percent of the injectibles in the pharma market, which is $ 120 billion of the pharma market," gleams Handa.

Core Healthcare started with injectibles and Claris took on the same area. The company still wants to be in the same segment and plans to expand by introducing new plants and leveraging the current capacity by targeting sales of Rs 1,000 crore by the end of the year 2008. "This will come through the strong product pipeline under construction," says Handa. "Claris will hopefully be a large pharma company in the next five years with the same focus," he states.

From sickness, to the pink of health, the journey for Claris has been an arduous one. Tenacity, patience and carefully crafted strategies on part of the management of the company have helped Claris Lifesciences to reach a new level of performance and success altogether. Truly, the company has dusted away the ashes of its past and is standing tall.

arshiya.khan@expressindia.com