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Indfrag plans consolidation strategy in overseas markets, scouts for contract manufacturing
Nandita Vijay, Bangalore | Tuesday, January 8, 2008, 08:00 Hrs  [IST]

Indfrag Limited, the herbal extracts manufacturing company, is in the process of consolidating its presence in India and international markets with its range of 47 products. The company is also aggressively scouting for contract manufacturing orders to maximize its production capacity.

In order to get the best out of the 47 products (from Garcina to natural caffeine), the company's strategy is to widen its presence in terms of both customers and countries to grab substantial market share.

In the area of plant utilization of its state-of-the art export oriented unit (EOU) at Hosur in Tamil Nadu that has a 30 per cent excess capacity, Indfrag is open for contract manufacture orders from global or large Indian companies. Right now, of the 70 per cent utilization capacity, 90 per cent is used for in-house production and 10 per cent for contract manufacture business.

The business plan by Indfrag will now allow it to go for broad based distribution of products. While it focused on one customer for 70 per cent of its business, it has now started tapping orders extensively from companies for its entire range. This has resulted in not only having large customer profile but a better distribution of its herbal extracts, Philip Samuel, chairman and managing director, Indfrag told Pharmabiz.

The range of 47 herbal and botanical extracts are used for dietary supplements and sports nutrition to treat conditions like weight loss, management of blood sugar, cholesterol, sleep inducer, mind-nerve relaxant.

"Instead of focusing on three customers for a select range of herbal extracts, we have now developed over 300 customers. While 90 per cent sales are generated from 30 products, the remaining is from 17 products. However, Garcina continues to be a leader garnering 80 per cent of revenues from all markets," he added.

The company exports to 22 countries including US which is their major market followed by Europe, Far East, Russia, Japan, and Brazil.

Delving into the scene for herbal products and plant-based extracts globally, the Indfrag chief informed that there is a visible shift among herbal manufacturers worldwide to target food and cosmetics sector. The key factor which triggered the shift is the serious lack of customer confidence towards herbal supplements in the US because of side-effects especially in weight management formulations.

A lot of hype has been created for these products and many are not effective eroding the confidence of the consumers. There are several charges on companies against the false and irresponsible claims, with the result heavy fines are levied by the US Federal Trade Commission. New products launches are only 25 per cent creating an uncomfortable situation of herbal bulk drugs manufacturers. India on the contrary continues to show a positive response for herbal and plant based supplements.

In the wake of negative attitude in the West, Indfrag too is now working towards focusing on food and cosmetics sector. With natural fruits juices and use of Probiotics on the rise, demand for botanical extracts and herbal ingredients is on an upswing by leading food and beverage giants in the country and globally.

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