Arch Pharmalabs Ltd changing horizons
The entrepreneurial bug bit him at a very young age of 22 and the outcome was a financial services company. In 1998 his life changed track, when along with two co-founders he chose a radical option of getting into the manufacturing of Pharmaceutic...
By Juhi Shrivastava, TNN |
The entrepreneurial bug bit him at a very young age of 22 and the outcome was a financial services company. In 1998 his life changed track, when along with two co-founders he chose a radical option of getting into the manufacturing of Pharmaceutical Fine Chemicals. ���It was a mix of a calculated risk and adventure that motivated us to take on this challenging role. The company that we had identified was financially stressed and had filed with the Board for Industrial & Financial Reconstruction (BIFR) for protection,��� recalls Ajit Kamath, Chairman & Managing Director, Arch Pharmalabs Ltd.
From day one he knew that this was going to be a roller-coaster ride. The biggest challenge in front of
him was raising financial resources and attracting and retaining talent. With zero background in manufacturing and pharma, he had his share of naysayers and sceptics.
Since access to traditional banking channels was blocked for restructuring and turnaround of companies, he had to look at tapping friends and family to tide over the initial financial crunch. ���But that was only a limited and partial solution. We finally tapped into private equity, which provided us with the much needed succour to help finance restructuring plans,��� he explains.
���The first milestone was our successful rehabilitation of a sick company, achieved in two years, by taking it out of the BIFR purview. That has established our profile in the pharma world and the experience helped us go for further acquisitions,��� recollects Mr Kamath. He remembers that most of the assets that the company acquired were financially stressed.
���What we brought on the table was a mix of portfolio review (change of product mix) and the necessary financial resources to turnaround the company���s financials,��� says Mr Kamath. Subsequent to acquisitions, each of these companies has metamorphosed to healthy assets within an average time-frame of two years.
The company is fast moving towards its target of becoming the largest, in terms of both volumes handled as well as revenues, Indian Active Pharmaceutical Ingredients (API) and Intermediates company by 2010. ���In the next five years, we see Arch in the list of top 10 players in the global arena for pure play APIs and Intermediates manufacturing.
On the revenue side we hope to be closer to the US$ 1 billion mark,��� declares Mr Kamath. ���Always on the lookout for meaningful acquisitions, having done that so far on the Indian turf, we now think that we could probably look at overseas opportunities too,��� he adds further.
On a concluding note he extends his piece of advice to budding entrepreneurs - ���Be prepared to face a lot of resistance when you have ���disruptive��� ideas, don���t get intimidated by sceptics and don���t lose sight of your vision! And of course, keep your family tuned in to your plans!!���
From day one he knew that this was going to be a roller-coaster ride. The biggest challenge in front of
him was raising financial resources and attracting and retaining talent. With zero background in manufacturing and pharma, he had his share of naysayers and sceptics.
Since access to traditional banking channels was blocked for restructuring and turnaround of companies, he had to look at tapping friends and family to tide over the initial financial crunch. ���But that was only a limited and partial solution. We finally tapped into private equity, which provided us with the much needed succour to help finance restructuring plans,��� he explains.
���The first milestone was our successful rehabilitation of a sick company, achieved in two years, by taking it out of the BIFR purview. That has established our profile in the pharma world and the experience helped us go for further acquisitions,��� recollects Mr Kamath. He remembers that most of the assets that the company acquired were financially stressed.
���What we brought on the table was a mix of portfolio review (change of product mix) and the necessary financial resources to turnaround the company���s financials,��� says Mr Kamath. Subsequent to acquisitions, each of these companies has metamorphosed to healthy assets within an average time-frame of two years.
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Six acquisitions in five years and that too in the challenging API/Intermediates space have helped the company move up the ladder in the pharma world. Unveiling his success mantra, he says, ���To be change drivers in the industry by consolidation and on the micro front - be as backward integrated as possible for key product groups - to stave off imports and be self reliant���. He further elaborates, ���We are firm believers of the ���consolidation theory��� since only that will help stem fragmentation in the industry, which has led to multiple players competing for the same slice of pie.���The company is fast moving towards its target of becoming the largest, in terms of both volumes handled as well as revenues, Indian Active Pharmaceutical Ingredients (API) and Intermediates company by 2010. ���In the next five years, we see Arch in the list of top 10 players in the global arena for pure play APIs and Intermediates manufacturing.
On the revenue side we hope to be closer to the US$ 1 billion mark,��� declares Mr Kamath. ���Always on the lookout for meaningful acquisitions, having done that so far on the Indian turf, we now think that we could probably look at overseas opportunities too,��� he adds further.
On a concluding note he extends his piece of advice to budding entrepreneurs - ���Be prepared to face a lot of resistance when you have ���disruptive��� ideas, don���t get intimidated by sceptics and don���t lose sight of your vision! And of course, keep your family tuned in to your plans!!���
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