Drugmaker Granules India plans to invest ₹800 crore over the next three to four years in projects that will cement its position as an integrated player, enhance scale and be ready to meet growing demand.
“This year and next year we are planning for ₹400 crore, CMD Krishna Prasad Chigurupati said about the ongoing investments on formulations facility in Hyderabad and API manufacturing in Visakhapatnam.
These include building a new block at the Gagillapur Finished Dosage and PFIs plant here.
It will the largest Multiple Units Pellet System (MUPS) plant. The estimated total investment in Hyderabad, including on equipment for packaging line, will be about ₹250-260 crore. In Visakhapatnam, the company is investing to expand capacity of APIs (active pharmaceutical ingredients).
“Whatever formulations we are developing, we have gone backwards, we have developed APIs for that. We have done this on a smaller scale… expanding the capacity there,” he said, adding the company has developed seven APIs. The investment will be about ₹90 crore.
The next ₹400 crore will be in the facility for which the company had recently bought land in Hyderabad’s Genome Valley. “This will be for our regular solid orals, also MUPS-based products meant for different markets globally and not just the U.S. Investment in the project will begin end of next fiscal and go on for 18-20 months, In addition, we have another complex dosage form which we will build there,” he said.
On funds for the expansions, he said “we see lot of [internal] accruals, ₹800 crore over three years is not a problem.”
Denying PE firms were planning to acquire Granules, Mr. Chigurupati, in an virtual interaction, said “the company is in a very sweet spot and hence, lot of PE firms are interested.
“We did have lot of offers… [but] are capable of running the company ourselves,” he added.
“We don’t need any other strategic investors at this point in time… not in the short term. [In future], I may give out some equity [but] not my equity,” he added.
Granules, which has a manufacturing facility in the U.S., is also considering options of having a plant for formulations abroad. It is considering South East Asian countries or having another plant in the U.S. In India too, the company is looking for another location, beyond Telangana and AP, he said. The company has also applied for 100 acres in the proposed Hyderabad Pharma City.
Elaborating on the decision to expand API manufacturing facilities in Visakhapatnam, he said “we want to protect our entire chain… want to be integrated in what we do.” In cases of certain low volume APIs that it sources from outside, the company prefers to maintain an inventory for 2-3 years.
“Such supply security measures are a big selling point in the U.S. [and] you get preference. We are capturing value at each stage and want to continue the same model,” he said.