M SARITA VARMA
After Ernst & Young's restructuring prescription, $60-million Sami Labs has decided to take an IT detour. Predictably, it is the growing global healthcare solutions pie that has the Banglore -based biotech behemoth going the software business way.
A stand-alone IT company is part of the Sami Labs' Rs 60-crore expansion and diversification plans for 2005, according to its chairman and managing director Muhammed Majeed . The company's in-house IT solutions division will soon log in at the Registrar of Companies as a separate firm Sabinsa Business Solutions. Under the restructuring monitored by E&Y, the group has also shed its US-based address to become a fully Indian business group. Sami Labs is the world's largest producer of L- Selenome-thonine (key micronutrient source for prostrate cancer preventive drug).
The entire roadmap for Sabinsa Business Solutions is ready including hiring the top officials, Dr Majeed told FE. An NRI software professional
Vinod Kumar has been signed up as CEO. “There will be no IPO route this time since internal accruals and bank loans will be sufficient ,” he said. Diversification to formulations business some six months ago is expected to rev up the total turnover to Rs 250 crore this year. This converts to 20percent jump in profits, leaving enough liquidity for financing expansion.
“We enjoy a wide network of goodwill throughout BT clients in the range of Avon, Estee Lauder and Twinlab. The new venture Sabinsa Business Solutions targets to draw more mileage out of this clientele,” he said. This would also mean trebling its headcount. From the present 20-seater feeder department, the IT division targets to major to a 60-seater software company in an year. The IT foray does not mean any downsizing of the core competency of Sami Labs BT ventures. “On the contrary, plant-based tissue culture and micro-based formulation would remain the reigning theme,” said Dr Majeed.