The Mumbai-based Galpha Laboratories is all set to commission its new formulation plant in Baddi in Himachal Pradesh by the first week of June. The company, which is currently operating its liquid and solid formulation unit its Ankaleshwar plant, is planning to set up another plant in Baddi for injectables soon.

The Rs 60-crore company, currently one of the active players in the segments like antibiotics, nutritional, pain management and gastro intestinal products, has set up this new plant at a cost of Rs 9.5 crore. With the commissioning of the second plant, the company is expecting to increase its total manufacturing capacity to more than double.

Galpha's currently established brands in the Indian market include Odicef, B-Collen GRP, Rhumacort, Clanoxy and Pandostal. With a 600 plus field force in the domestic market, the company is also active in a few export markets.

The Ankaleshwar plant, which is running at 100 per cent capacity, has a total manufacturing capacity of 10 lakh litres per month per shift. The new plant at Baddi would have a capacity of 10,000 litres per day along with 10 lakh tablets and 10 lakh capsules per shift.

While talking about the economy of setting up a plant at Baddi now, N S Shenoy, vice president (commercial), Galpha Lab, told Pharmabiz, "We, as a medium scale company, have spent around 75 per cent of the plant cost from internal resources and the rest was raised through external finances. With the existing taxes and duty incentives, we expect to recover the entire cost of the infrastructure by 2007."

He added that the decision to set up a plant in the tax holiday state would help a medium scale company to not only increase the production capacity but also to optimize its profitability in the critical pharma retail market where a number of new adverse factors like patent regulations, implications of VAT, trade margin issues following the MRP based excise duty and the ever growing competition among the parallel market players.