Balaxi Ventures to expand into three central American markets1 min read . Updated: 30 Sep 2020, 06:09 PM IST
- Unlike larger, more developed markets which have an established distribution chain to which pharmaceutical companies outsource the job to, drugmakers have to set up the entire logistics chain in smaller markets
NEW DELHI: Balaxi Ventures, a Hyderabad-based pharmaceutical firm, plans to enter the central American markets of El Salvador, Nicaragua, and Honduras by setting up wholly-owned distribution units, eyeing these smaller but high-margin pharmaceutical markets.
“Margins are pretty high for our company in these markets as we are the producers and exporters to these countries and are also the importers and distributers in these countries. We encompass the entire value chain. So our margins are quite high," managing director Ashish Maheshwari told Mint.
Unlike larger, more developed markets which have an established distribution chain to which pharmaceutical companies outsource the job to, drugmakers have to set up the entire logistics chain in smaller markets. So while volume and revenues are lower in these markets, their own distribution chain helps Balaxi eke out higher margin in these countries.
Maheshwari said that expects the company, which will soon change its name to Balaxi Pharmaceuticals Ltd, to garner 30% margin on products sold in the three countries, around twice or even thrice the margins in smaller markets. In Dominican Republic and Guatemala, the company generates $5 million-$7 million each in sales annually. The drugmaker is also present in Angola.
The expansion in El Salvador, Nicaragua and Honduras follows the company's foray into landlocked Central African Republic last year.
The pharmaceutical firm plans to start operations in all the three markets by the first quarter of next year.
In 2019-20, the company had garnered revenue of ₹45.6 crore, an over four-fold growth year-on-year, while profit surged 212% to ₹6.1 crore.