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RPG Life plans Rs600 mn capex for new business

RPG Life plans Rs600 mn capex for new business

Mumbai: RPG Life Sciences plans to invest about Rs600 million over three years to enter specialised oncology and psychiatry drug segments, its top official said late on Monday.

“The sales (in these segments) are rising more than 20% annually and hence they present an immense growth opportunity," AS Chouhan, managing director, told Reuters in an interview, adding that these segments are valued at Rs35.7 billion in India.

RPG Life plans to launch nine new products in these two segments in July, he said.

“We have made in all 40 filings with the (US) FDA so far," he added.

RPG Life Sciences, a part of the 160-billion-rupee RPG group, which has interests in tyres, energy, infrastructure, information technology and other sectors, reported sales of Rs1.63 billion on net profit of Rs108 million for in FY10.

“The new drugs being launched are expected to boost revenues in the next financial year (FY12) and not the current," he added.

Along with drug launches, RPG Life Sciences is also exploring options to set up a drug-delivery service.

“Availability of oncology drugs is a major issue in the country," he added.

“We want to set up a home-delivery network operated through medical practitioners for supplying oncology drugs," he added.

The drugmaker has invested Rs250 million over the last two years to expand and upgrade its manufacturing units in Mumbai and Ankaleshwar in the state of Gujarat.

The firm presently makes domestic and international formulations, active pharmaceutical ingredients (APIs) and generic drugs.

While the global formulations business generated about Rs1 billion of revenue in FY10, the APIs and generics segments earned Rs450 million and Rs15 million respectively for RPG Life Sciences, a statement said.

“With our current portfolio, we expect to beat the pharma sector growth in FY11 in revenue terms," he added, without specifying a number.

The investments in the new products are expected to impact the drugmaker’s profit margins he added.

The company does not plan to raise funds through the market. “All our requirements would be met through internal accruals and long-term loans," he added.

At 10 am, shares of RPG Life Sciences were trading at Rs99, up 3.65% in a weak Mumbai market.

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