Phytotech Extracts has entered into a joint venture with a European company to establish a state-of-the-art herbal extraction and production research unit at Nanjangud, Mysore. The company has invested Rs 10 crore to set up a US FDA compliant facility which will focus on exports. The construction is underway and is expected to be completed in September 2008.
It is also contemplating foray into the national market going by the increasing awareness for herbal and botanical extracts in pharmaceuticals, nutraceuticals and functional foods in the country.
Once the new facility is up and running Phytotech intends to sell the existing facility at Bommasandra. The company also plans a domestic foray as health foods are gaining popularity. The country is already exposed to herbal extracts though ayurveda and therefore product introductions will not be a problem, stated V Hariharan, CEO and managing director, Phytotech Extracts.
Phytotech is known for its modified dosage forms. Its products are classified under standardized botanical extracts and phyto nutrients, herbal cosmeceuticals and other nutraceutical substances. It undertakes contract research and co-development and production of a range of extracts. Notable ones are nutritional iodine from algae extracts an anti oxidant and Aescin, an extract from horse chestnut used for varicose veins. The company also has several value-added products from extracts of mango stein, noni, mulberry leaf, Acacia Catechu which has antimicrobial effects. All these are exported as specific formulations.
The company has a major presence in the contract research and product development. Right now the company has a total strength of 32 and the new facility will another 50 people.
The company is a well-known in the global markets and quality and efficacy standards of its products have led to a couple of recognitions. These include the Business Initiative Award and the International Quality Crown Award.
In 2005-06, the company reported a sales of Rs eight crore in 2006-07 it rose to Rs 11 crore. For FY 2008, Phytotech is projecting a sales revenue of Rs. 18 crore.
Currently, value of the global market is estimated to be $300 billion with a growth rate of 25 per cent annually. Indian market size is valued at around Rs. 1,000 crore with an annual growth rate between 15 and 18 per cent. Apart from Phytotech, the leading names in this segment are Alchem, Sami Labs, Indfrag, Amsar, Goa and Phytotech.
The biggest hassle in the herbal extracts sector is the lack of regulations and no dedicated laboratory at the national to benchmark the product quality, stated Hariharan. On the international front, the products from India do not have adequate clinical trial data to support the efficacy and safety of the extracts. Now with the US FDA Pharmacopoeia 2006 and implementation of the European Union Food Law will see an increased ban on herbal products because of its poor therapeutic efficacy and side effects. Only products which have the quality and efficacy can have the potential to have a positive impact on the treatment of disorders and diseases will prove to be a thumping success, he added.
The prevailing issues are that clinical trials are exorbitant, return on investment is poor. Present trials are not exhaustive to prove to the customer the efficacy and safety of the product. Inordinate delays for patent grants and lack of a regulatory body to grant GMP certification.