The Maharashtra State Chemists and Distributors Alliance Ltd (MSCDA Ltd), the pilot project of the nationwide distributors company initiated by All India Organisation for Chemists and Druggists (AIOCD), is expected to commence operations in October 2007. The MSCDA is targeting to make an annual business of Rs 7200 crore in Maharashtra.
The company is currently in talks with the top 20 pharma companies to finalise distribution alliance and is planning to float the company by signing an agreement with four to six companies initially. MSCDA Ltd, which has already finalised the business agreement with some of the top-level pharma manufacturers, will sign individual agreements with the companies in August 2007, according to Anil Navander, general secretary, Maharashtra State Chemists and Druggists Association (MSCDA).
"Currently we are in talks with top 20 pharma companies which account for 80 per cent of the total market share in India and another 10 major companies. Though the pattern of agreement with all the companies would be common, we would sign agreements with each company considering various trade aspects including the business quantum and the number of stockists for each company at present," he added.
The Association has designed a plan to complete the first round of talks with the manufacturing companies by mid July, to sign agreements in August and to begin the operations by October this year. It has also plans to negotiate with the top 20 pharma manufacturing companies in the country, including the Multi National Companies (MNCs). With around 90 per cent of the total pharma distribution channel in Maharashtra, the MSCDA has a strong hold in the market, unlike the other organized players, he averred.
According to J S Shinde, president, MSCDA and secretary of AIOCD, MSCDA Ltd is envisaged to hit Rs 7200 crore worth of business in a year in Maharashtra within the first two fiscals of operation, which will be 80 per cent of the Rs 9000 crore total drug market in the state. He said that the state branch is expected to touch Rs 600 crore business by 2008-09 fiscal.
As Pharmabiz reported earlier, MSCDA Ltd is coming up with an investment of Rs 50 crore, in which Rs 35 crore has been collected as equity capital and Rs 15 crore as preferential share capital. The financial working capital for MSCDA Ltd will be provided by Bank of India.