The Punjab-based IOL Chemicals and Pharmaceuticals Ltd (IOLCP), the major bulk chemicals, intermediates, speciality chemicals manufacturer in India, is expanding its current manufacturing capacity along with backward and forward integration projects with an investment of Rs 256 crore to become global major in certain bulk drug segments.

IOLCP, the second largest producer of the non-steroidal anti-inflammatory drug (NSAID) - ibuprofen - in India, is expanding its capacity to produce Isobutylbenzene (IBB), acetyl chloride and mono chloro acetic acid, the raw materials of ibuprofen. The funds will be sourced through term loans in tune of Rs 170 crore, equity share capital of around Rs 58 crore and internal accruals and unsecured loans of Rs 28 crore.

The production of ibuprofen raw materials will be increased from the existing capacity of 3600 tonnes per annum (TPA) to 6000 TPA within the current financial year, making the company the largest ibuprofen manufacturer in the country and the second largest in the world, according to R K Thukral, executive director, IOLCP. The forward integration in chemical division will be for producing acetyl chloride and mono-chloro acetic acid and backward integration in pharmaceuticals division for producing IBB.

The plans are to expand IOLCP's sales of generic API ibuprofen to regulated markets such as those in the United States and Europe through widening its product base and capacity by means of increasing product research and innovative technologies. The company, which has exports to 52 countries at present, will focus on the European and US markets which would open with the regulatory approvals and which constitute a market size of almost 20000 metric tonne.

"IOLCP, through its quality-focus, dedication to technical excellence and an unwavering commitment to its customers, has developed a wide network of satisfied clientele. Having established a strong domestic presence, we now look to expand our horizons and serve the international market with our high quality products like bulk chemicals, organic chemicals," said Thukral. The expansion projects are expected to be completed during the financial year 2009-10.

The total market size of Ibuprofen in the domestic market is close to 8000 MT while the exports market is approximately around 30000 MT. However, affected by the global meltdown, the growth rate has come down from seven to eight per cent to three to four per cent, he added.

Besides, the company is also planning to foray into proton pump inhibitors business with a project to manufacture rabiprazole, omeprazole, pantoprazole, esomeprazole and lenzoprazole in its facility. The project is designed to be complete with a capital expenditure of around Rs 250 crore. The company is also interested to prove its presence in anti-ulcerants and anti-diabetic segments, said Thukral.

The Rs 334 crore-IOLCP is expecting a turnover of Rs 407 crore in the current financial year. With the completion of the current expansion and forward and backward integration projects, the company is expecting to reach a target of Rs 500 crore-revenue during the financial year 2010-11.