Agriculture & Industry Survey,
Vol No. 13, Issue No. 12 .
Medicinal plants farming

This Bangalore-based firm today has more than 4,000 acres of medicinal plants contract farming.

 

Excerpts from a recent interview with Sami Labs, Bangalore.

Sami Labs Ltd, a Bangalore-based multinational and a leading producer and exporter of nutraceuticals, standardized herbal extracts, fine chemicals, cosmeceuticals, probiotics and various enzymes is fortifying its focus on contract farming for medicinal plants, starting with Coleus forskohlii. The company, which started the backward integration in 1999 with just 100 acres of land today, has more than 4,000 acres of land under cultivation.

“We have started with the cultivation of coleus which could be used globally for lean body mass management properties. Cardiovascular and orthopedic care are our next areas of priority and we plan to move further by identifying and cultivating few more medicinal plants in India,” said Dr Muhammed Majeed, chairman and managing director, Sami Labs, while addressing the press.

The company will provide technical expertise, facilitate loans and insurance cover for the crops by entering into a buy-back agreement with the farmers. Under contract farming, Sami Labs is expanding to 20,000 acres of land by entering states like Karnataka, Andhra Pradesh, Maharashtra and Uttaranchal. “These extracts will enable value-added exports and Sami will invest on manpower, training and fertilizers,” added Dr Majeed.

The company is developing natural drug molecules, which are in the pre-clinical evaluation stage and plans clinical evaluation with big pharmaceutical companies. Sami is also signing up with the Manipal Hospital for clinical study on its dietary products. It is driving biotech research in probiotics and is expected to rollout products by the end of 2004. The company’s three new active ingredients – Tetrahydrocurcuminoids (THC), Coleus oil and ZeaLutein have been approved and are set to revolutionize the dermatology, infective and geriatric ophthalmology markets.

Sami now has a total of 27 US patents of which nine are granted, three are allowed and 15 are pending. With an active patent regime, the company hopes to infuse significant R&D funds in its pursuit of developing new products. Sami aims to pursue strong R&D in the areas of herbal science, biotechnology, new product development by applying advanced and modern technology, adhering to stringent quality standards and marketing expertise.

With a turnover of Rs 250 crores, the company expects about 30-40 per cent growth in the next one year. The company is targeting Rs 100 crore turnover for its formulations business in India by the close of 2006. Currently, the formulations division is ethically promoting 9 nutraceutical products targeted at the Indian market.


Interview with Dr Raj K Bammi
Who is the main promoter of Sami Labs? What is the business background?
Dr Muhammed Majeed (Chairman and Managing Director) is the main promoter of Sami Group of Companies. Dr Majeed is an enterprising pharmacist who successfully introduced new products in the nutraceutical, cosmeceutical and pharmaceutical industry in the US markets.

Armed with a Ph.D. in Industrial Pharmacy, Dr Majeed pursued a successful research career in the US, starting with Pfizer, while continuing to achieve academic goals. With a strong academic background and hands-on experience, he worked for companies like Carter-Wallace, Paco Pharmaceuticals etc. In 1998, with a rich experience in research, he decided to set out on his own and established Sabinsa in the US.

What distinguished Sabinsa from other herbal products in the US market was that they were all standardized extracts, meaning that the potency of the active ingredients could be assured, batch after batch.

Dr Majeed’s method of research involves focusing on a target and expending every effort to achieve that target “with the understanding that if you fail, you will learn from that failure…” His return to India in 1991 saw the birth of Sami Chemicals and Extracts Ltd, which was later renamed as Sami labs Ltd. The company’s first export was Gugulipd, a standardized extract. “Once the first product was accepted, the first roadblock was cleared, and was a stepping stone to opening more doors.”

Sami Labs continues to manufacture and sell standardized extracts as well as nutritional and pharmaceutical fine chemicals. In addition, the company is in the processing of adapting several pharmaceutically useful herbs from around the world in Indian soil and assisting the Indian farmers in cultivating them. Sami Labs will do the extraction and export. International collaborations will form an important part of Sami’s strategy.

Today, Sami has seen unprecedented growth and has emerged as one of the major players in the nutraceuticals market.

Q: Why has your organization decided to get into contract farming of medicinal plants?
With our experience in the past, we have observed and stressed upon quality and manufacture and supply standardized products. Quality is the major criteria in today’s competitive market. So, to ensure good quality products, one has to start right from the roots. Backward integration has been the direction the company has followed and therefore medicinal plants cultivation becomes vital.
As Corporate Social Responsibility and with our strong R&D, we believe we can add value and share our knowledge and work closely with the farming community by coming to an understanding for medicinal plant cultivation.

Q: Which are the crops you are currently cultivating? Which parts of the country are you concentrating on?
We are focusing our efforts on Coleus. Apart from this, we are also into cultivating Melissa, Sage and Turmeric. Coleus is largely being cultivated in Tamil Nadu, Karnataka and in parts of Andhra Pradesh.

Q: How many farmers are today growing medicinal plants for Sami Labs? What is the extent of acreage?
Close to 1,500 farmers are engaged today with medicinal plant cultivation for us. There should be around 5,000 to 6,000 acres.

Q: How does your contract farming model work? What are your terms with the farmers? What do you provide them? What is the obligation from the farmers’ side?
Contract farming is a system of farming wherein select crops are grown by the farmers under the buy-back agreement with an agency engaged in trading or processing. The objective is to ensure the supply of raw materials meeting quality and quantity requirements on a steady/ seasonal basis to meet customer’s requirement.

Planting material and plant protection will be supplied by the company. Assured irrigation is a must. Farmers must use only company issued pesticides.

Harvesting will commence after 150 days and there will be only one harvesting and farmer should deliver at company specified buying point soon after harvest. Crop shall be sold to the company, and premature closure of the crop is prohibited.

We provide them with on-farming training assistance (technical) – free of cost. Crop insurance is provided in certain areas. Bank finance assistance is also provided. In case of crop damage/ loss, we pay them incentives. Logistic support is given in form of transportation. Price stability and fair returns through prices is decided in advance of the crop season.

There is a guaranteed buy-back with no middlemen involved. Interest free credit facility in kind by means of advance supply of seeds, fertilizers, pesticides, imparting new technological assistance and safer source of income for the farmers is provided.

On their part, farmers should honor their part of the contract and give 100 per cent of the produce to the company. If farmers deviate from the agreement or sell to competitors, then we refuse to procure the remaining material and disassociate from them for all future activities. Farmers should follow the package of practice as recommended and provided by the company and ensure high yield quality.

Q: Do you provide a firm buy-back guarantee to the growers? What is the price you buyback the produce from them?
Yes, we provide a firm buy-back guarantee. The price depends on the quality of the yield.

Q: How do you select growers for your contract farming? Do you have any specified criteria?
We organize farmers’ meet and participate in various related exhibitions, fairs. We educate them and evaluate the interest levels and enthusiasm and establish a relationship. We choose to work with farmers who have suitable soil, suitable terrain, good water resource and have clean farming practices like weed and water management.

Q: If our readers are willing to grow medicinal plants, are you willing to consider them? If interested, whom do they contact?
We would like to work with more farmers, as it is a continuous policy of the company that we are here to build relationship with farmers and show them a new source of income. This is also a step in the direction in a country where agriculture is the main occupation.
We may be contacted at: The Agriculture Department, Sami Labs Ltd, 19/1, 2nd Phase, Peenya Industrial Area, Bangalore 58. Phone: (080) 28390990. Mobile: 9448376445. Email: agri@samilabs.com

Q: Typically, how much income can a farmer cultivating one acre of Coleus forskohlii earn by your contract farming scheme?
Anywhere between Rs 30,000 to Rs 40,000 per acre, annually.

Q: How many field level personnel do you have to supervise this contract farming programme?
We have 40 trained technically qualified personnel who assist the farmers at every stage. In addition, we have 40 more backend support personnel.

Q: Coleus forskohlii is already being grown in India. Is there anything special in your planting material?
Coleus was never cultivated for medicinal purpose in India. It was only used for making pickles in Belgaum, Kolhapur region. Sami Labs has developed a high yielding product that is 25 per cent more potent.

Q: How much demand have you projected for Coleus forskohlii this year?
We expect a huge demand and are still working and analyzing the market. Sami Labs holds a patent on the same and hence the market potential is promising for us in the future.

Q: Is your contract farming project a short-term or a long-term activity?
It is surely a long-term project and we plan to get into various other medicinal plant cultivation in the future.

Q: Where are your processing facilities located? What do you plan to do with the Coleus forskohlii that you procure from the farmers?
We have state-of-the-art facilities in Nelamangala, Mysore and Kunigal. We supply Coleus to the domestic market and also export to the international market.

Q: How big is Sami Labs in terms of business turnover and manpower? What are your main business activities?
We are an Rs 250 crore healthscience company with about 600 employees.
Sami Labs Ltd is a leading producer and exporter of nutraceuticals, standardized herbal extracts, fine chemicals, cosmeceuticals, probiotics and various enzymes. Strong research and development in the areas of herbal science, biotechnology, chemical technology, new product development by applying advanced and modern technology, adherence to stringent quality standards and marketing expertise is the recipe behind the company’s success today.

Sami Labs is a research-oriented company with a string of international patents and a proven track record of innovative and quality products. The company has four state-of-the-art manufacturing facilities and a corporate office and R&D center in Bangalore, Karnataka. The company’s pioneering works have received recognition in the form of several national and state awards. It includes the prestigious Department of Scientific and Industrial award for R&D efforts.