The internal restructuring drive carried out by the Mumbai-based Veronica Labs Limited (VLL) has helped the company to lift its bottomline by 780 per cent.
During the last one-year period, the net profit of the company has increased from 0.25 crore in 1998-99 to Rs 2.20 crore in the year 1999-2000. During the same period, the net sales of the company has also increased by 2000 per cent, from 7.71 crore to 25 crore.
According to VVL sources, the healthy turnaround in the operations of the company was made through streamlining production facilities to improve efficiency and bring down a massive cut in production cost. The company has also revamped the marketing and changed its product mix by introducing products like paracetamol, caffeine, trimethorprim and metronidazole.
Based on this impressive performance, VVL now planning to take over a Gujarat-based pesticide and insecticide company having five production units. While striking the deal VLL would pump Rs 20 crore to acquire the same.
Reluctant to divulge the name of the company, sources said as per the current plans VLL will convert two to three of the units into formulations unit and at the others the company start the agrochemical business.
Besides, sources said, VLL is planning to double its capacity by setting up a new formulation and Research & Development (R&D) centre at Ravale, Navi Mumbai at a cost of Rs. 15 crore. Expansion is to be funded from internal accruals, preferential allotment to promoters and institutional investors. Expansion is expected to be completed by December.
The company's R&D activities are concentrated around product upgradation, particle study, review of production processes and modifications, quality improvement, development and evaluation of alternate raw materials and new product/process development, sources said.
The company is targeting a turnover of Rs 60 crore for the year 2001-02. The company is also in talks with an industry major for strategic tie up. The company is also planning to introduce new products for the local market.