Wanbury Ltd., the Mumbai-based bulk drug manufacturer, now in the process of acquiring Pharmaceutical Products of India Limited (PPIL), hopes to catapult its business with the acquisition, likely to be completed by the end of this year.
The Mumbai-based PPIL, also a bulk drugs manufacturing company, has two manufacturing facilities at Patalganga and Tarapur. The PPIL's Patalganga facility, said to be around five times bigger than Wanbury's existing unit at the same place, is a semi-finished unit, which would be completed and upgraded by Wanbury at par with the US FDA standards for approval by authorities in advanced markets. Also, Wanbury is using PPIL’s other plant at Tarapur.
Wanbury, claimed to be the largest manufacturer of metformin in the world, is planning to increase the capacity of Metformin from 2200 tonnes p.a. to 3000 tonnes p.a. after the expansion of these plants.
“Wanbury intends to manufacture certain new products from the Patalganga unit soon and use that for contract manufacturing services (CRAMS) business. One of the strategic advantages of acquiring PPIL is that both the manufacturing units are closer to the Wanbury's facility at Patalganga,” K Chandran, director, Wanbury told Pharmabiz.
As of now, the company has been assigned to Board for Industrial and Financial Reconstruction (BIFR). As PPIL is under BIFR, Wanbury is currently doing a scheme of arrangement with the lenders at PPIL, whereby it will get the approvals of the banks and financial institutions and subsequently it would take up the matter with other associated parties.
Wanbury has gone ahead with filing of the Petition for the Arrangement in the High Court and is expecting the acquisition process to complete by the end of 2005. The company has earmarked Rs 45 crore both for acquisition and capital expenditure, the upgraded unit will be available for commercial operation by the second half of 2006, he added.
Meanwhile, as part of its foray into CRAMS, Wanbury has entered into a strategic association with Doctors Organic Chemicals (DOCL), a bulk drug manufacturing company situated in Andhra Pradesh recently.
As per the collaboration agreement, it would market and manufacture products of DOCL by leveraging its network, technical expertise and customer base. Further, the company also intends to acquire a significant stake in DOCL in the near future.
DOCL has already got a US FDA approved facility for manufacturing of non-sterile APIs and presently manufactures lbuprofen, Mcfenamic Acid, Glucosamine and Gabapentene Intermediate among other products. Hence, this collaboration would allow Wanbury to immediately increase its product portfolio in the regulated markets of Europe and US. With this association, Wanbury would expand to over 14 products before the end of FY 2006 with over 8 products in the US market. In addition, DOCL has a large facility spanning over 18 acres with over 268-KL capacity and has a large expansion potential, Chandran informed.
It would revamp an idle plant at DOCL to add over 5 new products to the DOCL basket. Wanbury would also assist DOCL in completing some unfinished blocks at the facilities for contract manufacturing.
The company has field 4 DMFs in US and two in UK. The DMFs submitted for Metformin Hydrochloride, Salsalate BP/ USP, Mefenamic acid have been approved.
Wanbury Ltd has posted significant growth in sales and profitability during the year ended March 2005. The company’s net profit moved up by 166 per cent to Rs 7.01 crore from Rs 2.63 crore in the previous year. Its net sales also increased by 37.4 per cent to Rs 72.32 crore from Rs 52.64 crore.