Bal Pharma, Karnataka's medium-sized pharma major will commission its formulation unit at Panth Nagar in Uttaranchal in March 2007. The company invested Rs. 23 crore for this new initiative in the excise free zone identified by the Centre in a bid to prevent the impact of the excise duty levy on MRP for the formulation range.

The facility which is located on 4.5 acres would have a production capacity of 12-15 crore tablets, 2.5 crore capsules and 18 tonnes of ointment. "We expect to start production in March 2007 and capitalize on the domestic market advantage, 2006," Shailesh Siroya, managing director, Bal Pharma told Pharmabiz.

In the wake of a change in strategy by pharma companies in the country in the excise duty on MRP, Bal Pharma too is gearing up for more export market initiatives.

It is also setting up an active pharmaceutical ingredient (APIs) unit at an investment of Rs. 13.75 crore in Bommasandra in the outskirts of Bangalore for the regulated markets on a Karnataka Industrial Area Development Board (KIADB) land. This unit is slated to have an annual production capacity of 48 metric tonnes. Siroya informed that the two new plants (Uttaranchal and Bommasandra) would conform to US FDA and MHRA.

The company is on a consolidation mode currently. The new product launches with existing molecules continue. Its investments of Rs. 3 crore for a modern lab and the research-development activities is for in-house requirement are only for innovative products which would help to compete in the patent regime era.

To its current turnover of Rs. Rs. 76.47 crore for the year ended March 31 2006 which is higher by 27 per cent over the previous year of Rs. 60.03 crore, Bal Pharma generates 70 per cent of its earnings from the international market and the remaining 30 per cent from the national market.

Coming to the employee front, Siroya opined that the attrition rate was the highest and estimated to be around 20-22 per cent in the pharma sector. The areas which were affected most were the field force and administrative support services which was attributed to the new job opportunities in the BPOs and ITES segments. Among the technical workforce there was also an increasing shift for higher remuneration. With the two new projects at Bommasandra, Bal Pharma could see a staff increase of 15 per cent to the current 1,000 workforce.

Karnataka pharma industry was dull and lacked the upbeat which was prevalent in 2004, he said. In the national front, it was cut throat competition because of the presence of large number of players in the 'me-too' formulation segment. Hence price wars prevailed. Under such a scenario it was only aggressive planning to enter regulated markets which would enable companies to survive, he stated.