Kemwell Pvt Ltd, a formulations contract manufacturer in the country, has chalked out inorganic growth strategy where it is on the lookout for buyout opportunities in the South American region.
In the wake of the current economic slow down, global pharma majors are looking at cost cutting and increasing productivity by outsourcing to low cost countries like India and China. In South America, Chile, Argentina and Brazil indicate promising growth paths. These countries have a large multinational pharma production plant presence. In order to maximize profits, there could be facilities up for sale along with opportunities for contract manufacturing. Therefore, we are closely watching what could come our way, Subhash Bagaria, chairman and managing director, Kemwell told Pharmabiz.
Buoyed by the confidence of the acquisition made in mid-2006, where Kemwell bought the Pfizer's unit at Uppsala, Sweden and achieved cent per cent operational capacity catering to the European Union and US orders, it is now looking for such value-added acquisitions in South America, he added.
Acquisitions of a local manufacturing facility to cater to specific regulatory requirements will allow us to have instant access to a wider product portfolio and increase strong front-end capabilities. At the Uppsala unit, Kemwell held on to all the production of active pharmaceutical ingredients, tablets, capsules and suppositories, along with the Pfizer workforce. This gave us the edge to garner faster footprint in major markets. In the next phase of growth, Kemwell India will tap the experience from Sweden to enter Japan, stated Bagaria.
As part of its organic growth efforts, the Bangalore-based company is now gearing up to increase its capacity of its EMEA certified oral facility to 5 billion from the current 2 billion. The advanced production plant which is EMEA certified manufactures uncoated, sugar-coated, film-coated tablets, effervescent tablets and capsules with batch sizes ranging from 5 kg to 1000 kg. It has bagged orders from pharma majors in Europe and commenced the tech transfer.
With every global pharma giant evaluating on the kind of products that could be off-loaded to India to save costs that is estimated to be around 70 per cent cheaper over the developed world, Kemwell will now capitalize on such opportunities.
The current financial crisis will hardly have an impact on the Indian pharma sector. Only a war or natural calamities can affect pharma production plants to drastically bring down drug sales. The pharma sector is extremely positive because of its production capabilities to deliver total solutions from technology to product expertise. In fact, the current economic slowdown will increase opportunities.
Kemwell too is in an ideal situation because of its high standards of performance, reliability and quality. It handle 6 of the top 10 top multinational pharma giants including AstraZeneca, Bayer, GSK, J&J, Novartis, and Pfizer, informed the Kemwell chief.