The Maharashtra State Chemists and Druggists Association (MSCDA), an affiliate to All India Organisation of Chemists and Druggists (AIOCD), is on an anvil to enter into organized pharmaceutical distribution by establishing a limited company.

The company will be the pilot project of AIOCD's plans to establish limited companies in other states of the country under its umbrella, in order to win over foreign direct investment and large scale organized retail players for sustenance of its members, according to the AIOCD sources.

The company, with proposed name as MSCDA Ltd., is under formation stage and has set up an office at Mumbai. Plans are to commence the company with a capital of Rs 50 crore, in which each of the 36 district bodies in the state have a share valued at Rs 1 crore while the rest of the funds will be from the existing resources of the Association.

Sources informed that according to an executive committee meeting held at Pune on July 23, the project is planned to commence by October 2, 2006, though the details of the project are yet to be finalized. The Association, gaining inspiration from the success story of its retail chain initiative, Green Cross Healthcare Pvt. Ltd., may initially use the new company as a service provider for the retail chain according to these sources. The new company will approach selected pharmaceutical manufacturers, which are in good terms with the Association and plans to negotiate on prices.

"The project is in a preliminary stage. We found that this is one of the possibilities for us to sustain from the threat of foreign direct investment and the upcoming large scale retail outlets through collective bargaining," A M Mohan, President, All India Organisation of Chemists and Druggists (AIOCD) told Pharmabiz.

He said that the there are examples like success of co-operative sector in Maharashtra, Gujarat and Kerala, with a size of amount 75 percent of total co-operative sector and this initiative hopes similar scopes. The Organisation will consider commencing similar state wise companies once the pilot project meets success.

Sources from the Organisation also informed that by forming the company, the entire purchase will be passed on through the company and the deals with manufacturers can be settled through a single payment. Plans are to enter into chain retail market all over India under the company later.

As Pharmabiz reported earlier, Green Cross Healthcare Pvt Ltd, retail chain outlet of the Association was formed to face the challenges of the post-GATT era. MSCDA has a policy to encourage such organised retailing in the state and welcomes its members to float regional societies or companies, which will manage the running of all retails shops in that region in an organized manner. The new initiative to enter into organized distribution will enable the organization to help the retailers, according to some affiliates in other states.