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www.aurobindo.com |
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AUROBINDO
RESTRUCTURING FACILITIES TO BECOME
A R&D LED PHARMA COMPANY WITH GLOBAL PENETRATION
POSTS Q1 TURNOVER OF RS.189.96 CRORES |
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Aurobindo Pharma Ltd. has registered a Total Income of Rs.189.96 crores
(Rs.216.10 crores), for the first quarter ended 30th June, 2001.
During the period, Profit Before Depreciation, Interest and Depreciation, stood
at Rs.26.93 crores (Rs.34 crores).
After providing Rs.11.01 crores (Rs.7.58 crores) towards Interest, Rs.3.65 crores
(Rs.3.12 crores) towards Depreciation and Rs.1 crore (Rs.2 crores) towards Provision for
Taxation, the Net Profit for the quarter stood at Rs.11.27 crores. Exports constitute 44% of
Turnover.
The Company has embarked on major restructuring and modernisation of its
production facilities to make them compliant with USFDA/European regulations. The first quarter
performance reflects the short term effect of this restructuring strategy (please see details
of restructuring programme).
As part of its programme of cutting down the high cost facilities, the company
closed down its Pondicherry plant.
Major revamping of the Srichakra bulk drug facility was undertaken during the quarter
resulting in fall in capacity utilisation. In addition, the port
strike at Chennai resulted in loss of 20 days of production for some key products. |
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The formulations business during the quarter recorded a Turnover of
Rs.17.23 crores, a remarkable growth of nearly 200%, as compared to the corresponding period
in the previous year.
Compared to the corresponding period in the last quarter, the interest and
depreciation costs are significantly higher by nearly Rs.4 crores on account of the major
investments made in joint ventures, subsidiaries as well as in modernisation.
Aurobindo has grown at over 50% CAGR in Turnover during the past five years. In the current year, the
restructuring process undertaken to build a robust product and market portfolio, will result
in a drop in capacity utilisation.
The EPS is expected to be around Rs.30 in the current year.
The full benefits of globalisation and operating efficiencies will be visible
from 2002 onwards. The company expects a quantum leap in Turnover and Profits in the next
year.
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| RESTRUCTURING
OF MANUFACTURING FACILITIES TO BECOME A R&D LED INTERNATIONAL PHARMA COMPANY with
global penetration
and
robust future |
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Aurobindo Pharma Ltd. has set its sight on becoming the R&D led
international pharma company in the next couple of years.
To achieve this objective, the Company has embarked on major restructuring of its
manufacturing facilities to make them compliant with USFDA/European regulations. |
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| Background |
| a. |
The Company has the following bulk drug facilities viz. Pondicherry, Unit 2,
Unit 4, Unit 5, Unit 6 (two blocks) and Srichakra bulk drug facility. |
| b. |
The company's formulation facilities include Unit 3 and Unit 6B. |
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| Bulk Drug Strategy |
| Strategy of restructuring the manufacturing facilities is outlined below : |
| 1. |
a) |
In the first quarter of the current
financial year, the Pondicherry unit will be closed down. |
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b) |
The Srichakra bulk drug facility which has two blocks will be completely
revamped and expanded. In addition, two more blocks
for cephalosporins and non cephalosporins will be added in this facility which has been renamed as
Unit 1. |
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c) |
Two blocks of Unit 1 are ready; one more block will be ready by end August,
2001 and the 4th block is expected to get ready around December 2001. |
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d) |
On completion, Unit 1 will become a 17 acre state-of-the-art facility
conforming to USFDA/European regulations for manufacture of several bulk drugs for export to both
regulatory and non regulatory markets. |
| 2. |
In the second quarter of the current year, Unit 2 will be integrated with
Unit 5, which has already been expanded.
In the current quarter, part of Unit 6 has been shifted to Unit 5 to facilitate upgradation
to USFDA standards. |
| 3. |
In the third quarter of the current year, Unit 4 will be closed and the
activity shifted to a new integrated green field facility in Andhra Pradesh. |
| 4. |
In the second and third quarters of this year, Unit 6 will be upgraded to
USFDA/European regulation standards. |
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With this restructuring, Aurobindo Pharma will have two bulk drug
facilities viz. Unit 1 and Unit 6, complying with all international regulations and two modern
cGMP compliant, cost efficient integrated facilities by the end of the current fiscal year.
This
will give the company access to regulated markets to encash on its R&D successes.
Its cost efficient and well controlled facilities will enable it to
compete in global markets especially, China.
This will also result in a robust market mix as well as a strong product
mix for the Company, thereby having a significant effect on the company's bottom line and EPS.
Formulations Strategy
The formulation plants viz. Unit 3 and Unit 6B are being modified so that they become
compliant with US and European regulations. Investments are being made as per the guidance of
international consultants.
The Company expects MCA inspection in the current year and the USFDA
inspection in the next year.
General
The Company has tied up the required funds for the current and ongoing projects. |
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| Impact |
| 1. |
On the completion of the restructuring, Aurobindo Pharma will have four
modern and cost efficient facilities for bulk drugs and intermediates and two state-of-the-art
formulation facilities. These manufacturing
capabilities will be backed by a state-of-the-art R&D facility which has already been set up
by the company and is in full operation. Aurobindo Pharma will thus have a requisite
infrastructure needed to achieve its objective of becoming a R&D led international pharma
company. |
| 2. |
During the restructuring and modernisation programme, the company expects
around 20% drop in capacity utilisation. While there will be a short term impact of a drop in
capacity utilisation, the Company expects to start reaping the initial benefits of the cost
efficient facilities by the end of this year. |
| 3. |
The full benefits will be visible in the fiscal year 2002 - 2003 which
promises to be a year of quantum leap in both Turnover and Profitability. |
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PRESS
ROOM 