Investments flow into Chandigarh as Pharmaceuticals invest over Rs. 500 crores

 

The Pharmaceuticals Company, Surya Pharmaceuticals is planning major expansion with an investment of over Rs 500 crore to be used to build a Greenfield integrated project for the manufacture of Active Pharmaceutical Ingredients (API) and formulations. The company, based in Chandigarh city, additionally, will be venturing into third party marketing tie-ups with the aim of bringing international medical products to India.

 

The Pharmaceuticals Company plans to commission a new plant at Sambha, near Jammu the coming month at estimated investment of Rs 320 crore for the manufacture of API, formulations and sterile injectibles.  It is expected that the new plant will begin manufacturing in full capacity by latest December this year.

 

The company announced in its plans that it would go for the dilution of its equity via Global Depository Receipts (GDR) and preferential allotment of shares that will be needed for this intended expansion. The Company’s corporate finance and retail president said the scheduled meeting of its board tomorrow will decide on the dilution of Surya Pharmaceuticals’ equity.

 

However, he did not disclose the details of the figure or amount of funds planned to be raised from GDR but company sources divulged that the company proposes to raise Rs 250-300 crore. Even so, he revealed that Surya Pharmaceuticals was on the last stages of finalizing a deal by which it plans to purchase land in Mohali district for the construction of a new manufacturing facility. The new manufacturing facility will be an integrated one and will manufacture API and formulations of non-beta lacturn products.

 

Surya Pharmaceuticals begun its retail business in 2009 when it opened its pharmaceuticals chain of retail stores called Aviva and is therefore up for third party marketing tie-ups for expansion. Consequently, the company has become the exclusive retailer for Crocs medical footwear in India and plans to sell at least 1.50 lakh pairs this year and over 6 lakh pairs in the next financial year. 

 

Since Surya Pharmaceuticals’ entry into the phytochemicals market in 2008, the company has managed a high sustained year-on-year growth rate of 40% and in the fiscal year 2009/2010, it garnered a record high turn over of Rs 1,130 crore, a rise from Rs 729 crore in 2008/2009. This year, Surya Pharmaceuticals expects to achieve a growth rate of 40%. Surya Pharmaceuticals has had such sustained growth and expansion as a result of major investments that have been crucial to this success.


May 28, 2010.