BUSINESS LINE
Tuesday, Feb 22, 2005
CR Sukumar

Sami Labs eyes Rs 2000-cr turnover in five years

Hyderabad: Sami Labs Limited, the Bangalore based Rs 250 crore transnational health science company, has firmed up a short term business plan of reaching Rs 450 crore turnover by next year en and a long term plan of attaining Rs 2,000 crore turnover in the next five years.

The company plans to upgrade the existing manufacturing facilities, set up two phytochemical extraction units in Andhra Pradesh, each at a cost of Rs 10-12 crore, and one dosage form in Karnataka.

Sami Labs’ Managing Director, Dr Muhammed Majeed, told Business Line that plans were to raise funds through an initial public offering mid next year to part finance the capital expenditure programmes.

Before that, the company may privately place equity with institutional players. Ernst & Young was appointed to negotiate with a few institutional investors for the purpose. A decision on the issue would be taken in the next couple of months, he said.

Sami has four manufacturing facilities in Karnataka and subsidiaries in the US, Japan, South Africa and Dubai.

“We have been registering a growth of 40 – 45 per cent in business volumes per annum for the last few years. We need to add at least 200 percent more manufacturing facilities to what we have now to meet the expanding demand for our products,” Dr Majeed said.

The company is spending 8-10 percent of its revenues on R&D. It has obtained 19 patents and 20 were in the pipeline, Dr Majeed said. It has also initiated clinical trails on some of its existing products, to tap a part of the nutraceutical market in Japan, the US and Europe.

According to Dr Majeed, the company has initiated negotiations with the Andhra Pradesh Industries Department and the AP Industrial Infrastructure Development Corporation for setting up manufacturing facilities in the State.

The company is considering Hyderabad and Visakapatnam for setting up the plants and expects them to take off the next 6-9 months.

“We also have aggressive plans for medicinal plants cultivation, both on our own and through contract farming agreements along with buy back arrangements with the farmers’ cooperative societies.”

“We currently have such contract farming arrangements in Tamil Nadu and Karnataka. We plan to have similar arrangement in Andhra Pradesh as well,” Dr Majeed said.