Chairman says company will be profitable from 2018-19
KOCHI: Kerala State Drugs and Pharmaceuticals Ltd (KSDP), the only state owned pharmaceutical company in the country, has signed a memorandum of understanding (MoU) with Central Drugs Research Institute (CDRI), Lucknow, as an initial and crucial step towards setting up the Oncology drugs plant within the premises of the company.
The company has already identified a six-acre land held by a cooperative hospital nearby the company premises for the purpose. Talking to businessbenchmark.news on the plans, CB Chandrababu (seen in the picture), the chairman of the company, said KSDP was expediting the work on this prestigious project, which may require investments to the tune of Rs150-Rs200 crore.
“With the support of the government headed by Pinarayi Vijayan and with the blessings from the finance minister Dr Thomas Isaac, who is also the MLA for the area where KSDP is housed, I am sure the Oncology plant will become a reality sooner rather than later,” said the company chairman.
The management team headed by the chairman is firing on all cylinders to showcase KSDP as a model public undertaking that can leave all its bad years behind it and write a new chapter of productivity and profitability.
Like many of its members from the State PSU fraternity, KSDP also has very few years to boast as profitable years in the recent past – 2011-12 and 2015-16. However, Chandrababu is confident that 2017-18 will close with an operating profit and from there, he avers, there is no turning back for the company.
Chandrababu has his own cogent arguments to prove that. He admits that the company had languished too long and it has now decided to stick its neck out, and this has been a call that all the PSU top brass have taken with a grit.
For KSDP, the new beta lactam plant is ready for production with a new production line-up of antibiotic drugs and injectables, and the non-beta lactam production will soon be automated to scale up the production manifold.
Chandrababu said already the sales team has spread its wings outside the state, to Andhra Pradesh, Telengana and Tamil Nadu. Soon the company will open its sales in Karnataka and before long to other Indian states starting with Goa.
The Good Manufacturing Practice (GMP) approval the company received for its manufacturing facility from the World Health Organization (WHO) has opened up vistas for the company to look beyond India for its market. The company is likely to soon start exporting its medicines to African nations such as Ghana, Kenya and Zimbabwe, and Asian nation Cambodia from 2018-19 onwards.
The chairman said the next five years would see the company witness investments to the tune of Rs500 crore, which would take the turnover several multiples of the investments. “I don’t want to venture into predicting turnover numbers at this juncture as it would be the usual refrain,” Chandrababu added.
The continuous loss history of the company has left KSDP, with a paid up capital of Rs9.08 crore and a current assets of Rs154.64 crore, in negative net worth of Rs96.78 crore as of March 2017.
Though the market size of the government healthcare services requirement alone is Rs400 crore annually, KSDP had to be satisfied with a small pie from that – at around Rs18 to 20 crore.
Finding reasons for the poor performance of the company that was set up way back in 1974 may prove to be a futile exercise, but the fact remains that there has not been any technical up-gradation for its plants for years.
But the picture is fast changing; the new beta lactam plant that can produce antibiotic capsules and injectables has already been installed and is now in the stability chamber and the plant once becomes operational could produce drugs and injectables for government, boosting the company turnover substantially.
Moreover, the new fully automated non-beta lactam plant will also get ready soon and this is expected to boost the production by more than 10 times
“I am sure, we will more than double the turnover- in excess of Rs75 crore for 2017-18 (the financials are still awaited) and the current year will mark the start of a profitable journey of the company.
KSDP will also lay its hand on humanitarian activities. With the instructions from the chief minister, KSDP will help the government in providing patients undergoing organ transplants with their life-long requirements of drugs at a subsidized rate of one-tenth its original price