Parenteral sees new units operating in 10 months

Parenteral sees new units operating in 10 months

Mumbai: Parenteral Drugs expects its two new manufacturing units, coming up in Kenya and Kazakhstan, to be operational over next 10 months, its chief executive officer said on Wednesday.

“The two joint venture projects, after completion, would generate up to Rs400 crore of revenue annually," Anil Mittal told Reuters in a telephone interview.

The two projects would see a combined investment of about Rs130 crore, he added.

“The cost of Kenya project is Rs800 million where we plan to make liquid and solid orals and intravenous fluids, while the Kazakhstan project will see investment of up to Rs500 million," he added.

Parenteral Drugs will have 51% stake in the Kenya unit and 90% stake in the Kazakhstan project, he said adding the rest would remain with local partners.

Growth View

Last month, the drugmaker reported a rise of 65.6% in April-June net profit to Rs107.3 million on net sales of Rs123 crore.

“In the current year, we are adding new manufacturing lines and expanding our present capacities in oncology and formulations segments, which would see net sales rising by 60-70 percent over FY10," Mittal added.

The firm has lined up capex of Rs110 crore for FY11, substantially more than the Rs850 million it had spent in FY10, he said.

The Indore-based drugmaker expects profit margins to grow by more than 80% in FY11, primarily due to sales growth in oncology and value-added intravenous fluids businesses.

Parenteral Drugs, which mainly operates in formulations, oncology and intravenous fluids segments, launched its product Tamolgan in the April-June quarter.

“Tamolgan, other anaesthetic products and value-added intravenous products would clock up to Rs100 crore of sales in the current fiscal," he added.

The firm, which derives 10% of its income from exports, has ended its pact with China’s Sinovac Biotech Co to import H1N1 preventive vaccines.

“We decided to cancel this project as the demand for H1N1 vaccines has lowered."

Shares of Parenteral Drugs closed at Rs250.80 on Wednesday, down 1.94% in a Mumbai market that ended down 0.82%.