Granules India Ltd, a leading manufacturer of multiple pharmaceutical formulation intermediates (PFIs), is planning to expand its production base and will be investing Rs 100 crore in forward and backward integration of its operations. The company proposes to fund the expansion plan through a combination of debt, internal accruals and fresh issue of equity. The funding modalities are being finalised and will be ready within a month.
The company has three manufacturing facilities for Paracetamol and Metformin on the outskirts of Hyderabad. While one plant produces 2,750 tonnes of Paracetamol exclusively, the other two plants produce Metformin and other PFIs.
According to C Krishna Prasad, Managing Director,“Now there is a demand for Paracetamol in the international market. However, for selling the product in the prescription market, we need FDA approval, which requires an exclusive plant. The price realisation per kg will also increase if the product is manufactured in an FDA-approved plant. We will be able to get about $7 per kg instead of $ 3.5 per kg.”
The new plant with an investment of Rs 50 crore will have a capacity to produce 6,000 tonnes of Paracetamol per annum. The company is also setting up a plant for manufacturing Metformin, another product commanding good demand in the foreign market. The company is in the process of tying up with an international pharma major for the supply of 1,000 tonnes of Metformin per annum.
The company has recently completed a Rs 30-crore cGMP compliant facility at Gangillapur, in Ranga Reddy district, for PFIs. The facility, which will be formally inaugurated on August 16, has an installed capacity of 7,200 tonnes per annum compared with its existing facility which has a capacity of 1,200 tonnes. PFIs are pre-processed blends of a single or multiple APIs that are ready to be compressed into tablets, filled into capsules or form into liquid dosages.
“Our unit is the biggest stand-alone PFIs facility in the world. PFIs, as a penultimate step for pharmaceutical formulation companies in the regulated markets, offer multiple benefits such as enhanced productivity, avoiding granulation bottlenecks, reduced regulatory compliance and lower in-process analysis costs. They offer the product in very big batches. It is a quick-to-market approach with least-cost for generic formulators,” Krishna Prasad said.
The company’s expansion plan would be completed by September 2004. Meanwhile, the company is expecting a turnover of Rs 100 crore for the current year and Rs 130 crore for the next year.