Over the years, the Bangalore-based Sami Labs Limited has
evolved as a developer and producer of standardised herbal
extracts, nutraceuticals, cosmeceuticals, fine chemicals,
probiotics and various enzymes. It is also engaged in tissue
culture and phytoenrichment studies and biotech research
on probiotics. Last year, Sami Labs added a clinical research
arm through the strategic acquisition of Clinworld. After
many years of concentrating entirely on exports, the company
forayed into the Indian formulations business in April 2002
with the launch of eight products under licence from American
Formulary Inc, USA. The change in focus of marketing strategies
is intended at strengthening the company’s presence
in the domestic market by introducing brand name formulations,
in addition to the export of raw materials and intermediates
to the international market. In this exclusive interview
with Rakesh Rao, Dr Muhammed Majeed, Chairman and Managing
Director of Sami Labs, speaks about the company’s
new initiative to augment its nutraceuticals and other businesses
in India as well as in overseas.
Q: Please take us through the major milestones
in the growth of Sami Labs Ltd.
A: The company was established as Sami
Chemicals and Extracts Pvt Ltd in 1991 to produce and export
standardised herbal extracts, fine chemicals and nutraceuticals
to the US. In 1994, Sami Chemicals became the second company
in the world and first in India to develop L-selenomethionine,
a more bioavailable source of Selenium. The company established
its manufacturing unit at Kunigal, Karnataka, in 1996. In
the same year, Sami Labs obtained three US patents on piperine
as a bioavailability enhancer, while it was issued a US
patent for hydroxy citric acid potassium salts as an appetite
suppressant in 1998. Sami Labs built its new research centre
as natural product chemistry, tissue culture and biochemistry
at Peenya, Bangalore, in 1998.
In 2000, Sami Chemicals and Extracts Pvt Ltd was renamed
as Sami Labs Ltd to reflect more accurately the company’s
changed activities from a herbal firm to a company dealing
not only with standardised herbal extracts but also chiral
compounds, biochemistry and biotechnology. Two yaers later,
Sami Labs inaugurated India’s first indigenously developed
super critical fluid extraction (SCFE) facility at Nelamangala,
Bangalore. The technology was developed by IIT-Bombay under
the ‘Technology Development Mission’ of the
Planning Commission, Government of India. This technology
represents a strategic shift from herbal extraction through
solvents to extraction through carbon dioxide process to
ensure more hygienic products to meet international standards.
Q: Since its inception, Sami Labs has
been a 100 per cent export-oriented company. But, of late,
it is increasingly targeting the Indian market. What prompted
you to take this decision? What is the strategy of the company
for the Indian market?
A: The nutraceutical market in the US is
well established. The ‘alternate’ systems of
medicine have gone through a phase of being ‘complementary’
medicine to being ‘integrated’ medicine in the
US. We are hopeful that the same trend would be followed
in India. Our market research has revealed a high potential
for the use of nutraceutical/ dietary supplements in the
country in the coming years.
With respect to India, our strategy is to market only claim-substantiated
products based on solid clinical research and trials.
Q: You have completed one year in the
Indian market. What has been your experience in the last
one year? How is the Indian nutraceuticals market different
from other developed markets like the US, Japan etc?
A: During the last one-year in the marketing
of nutraceutical formulations, we have learnt that the trends
noticed in countries like the US and Japan are being followed
in India. The potential for these products is tremendous.
The disposable income in the top 10% of Indian population
is as high as for the general population in the US and Japan.
The Indian consumer at the same time is more discriminating
and wants only ‘evidence based’ products rather
than products based on tall claims without scientific substantiation.
Q: How is the response for your new product
‘SelenoCare’, the first organic selenium supplement
to be introduced in India? Please brief us on the status
of the research, currently being carried out in the US using
A: SelenoCare contains organic form of
the essential trace element selenium, L-selenomethionine.
The product is showing promise of acceptance and growth
in India. The US National Cancer Institute is currently
carrying out clinical trial study on 32,400 men for the
use of L-selenomethionine in prostate cancer. The 12-year
trial study is into its fourth year now. At the same time,
10,000 subjects are also on this product for the treatment
of Alzheimer disease. It is showing promising results.
Q: What are your plans for the company’s
aroma chemicals division – Organica Aromatics?
A: Organica Aromatics has been so far present
mostly in the Indian market. Globally, the flavour and fragrance
(F&F) market is dominated by a few major players. The
potential for these products is quite high. In order to
enhance its business, Organica Aromatics is in the process
of setting up a new fully-automated good manufacturing practice
(GMP) compliant facility in Bangalore at an investment of
Rs 5 crore to cater exclusively to the global F&F industry.
The company hopes to quadruple its turnover in next year
from the present Rs 3.5 crores.
Q: What is the rationale behind acquiring
ClinWorld, a clinical research organization (CRO)? Any plans
to foray into clinical research segment on commercial basis?
A: As mentioned earlier, the real success
of a nutraceutical company will be based on claim-substantiation
backed by clinical trials. Currently, ClinWorld is conducting
about 19 clinical trials for Sami Labs in India. Its hands
are full at the moment, but at a later stage, it will take
up clinical research for other companies as well.
Q: What are you plans for entering the
pharmaceutical segment? Any particular therapeutic segment
you are bullish about?
A: We are seriously considering entering
into the pharmaceutical market. We have plans to set up
a GMP-complaint bulk drug facility at Kunigal to enter the
US generic market and to produce Coenzyme Q10 (Co Q10),
a support supplement recommended for patients having cardiac
Q: What are the R&D activities currently
being undertaken by Sami Labs?
A: In addition to developing new herbal
products, the company has undertaken major R&D efforts
to produce CoQ10. Right now, our main research focus is
on chiral chemistry and bio-transformations. Besides this,
Sami Labs is fortifying its biotechnology research for production
of high-end enzymes. We are also intensifying our search
for new varieties of medicinal plants. The research into
claim-substantiated is also being strengthened, both for
health segment as well as cosmeceuticals industry. The company
has 12 US patents granted already and another 22 are pending.
In the next 2 years, about 8 new patents will be filed.
This will help the company in the new WTO patent regime,
Q: The company recently appointed Ernst
& Young to prepare a roadmap for a comprehensive revamp
of its corporate structure. Please brief us on this?
A: Sami Labs Ltd has expanded its operation
in countries like the US, Japan and the Middle-East. The
company also owns Organica Aromatics Pvt Ltd and Anju Phytochemicals
Pvt Ltd in India. For better corporate planning and more
effective management, restructuring is underway with the
help of Ernst & Young to bring all the companies under
a single umbrella.
Q: Are there any plans for setting up
new plants or expansion of existing facilities in the near
A: In 2002, Sami Labs had spent 9% of its
turnover on R&D activities. The company will continue
with this trend. A new bulk manufacturing facility to manufacture
CoQ10 will be undertaken, while Organica Aromatics will
move into a new facility. Also, the company has plans to
set up a cGMP-complaint formulation facility for its other
Q: What major developments do you foresee
happening in the Indian nutraceuticals inustry in the next
A: We do see more competition in the Indian
nutraceuticals industry as it is anticipated that most of
the major pharmaceutical companies would enter this market.
Q: What is your outlook for the company
A: Inspite of September 11 incidents and
recession in the US market, the company hopes to do well
in the US. Sami Labs’ products are being well accepted
in Japan as well. We are in the process of establishing/
entering new markets in South America as well as expanding
our presence in the Indian market.