IOL Chemicals & Pharmaceuticals, on Wednesday said it is diversifying its active pharmaceutical ingredient (API) and specialty chemicals portfolios and is investing ₹300 crore on capex to set up plant in western India, as it plans to double sales in the next 5 years.
The Ludhiana-based company generates about 30% of its ₹2,216 crore revenues from the commodity API ibuprofen, where it is vertically integrated manufacturing the key starting material Isobutylbenzene needed for making the drug. Ibuprofen, an age-old drug, is used in the treatment of pain.
The steep drop in ibuprofen prices have been hurting the Ebitda margins of IOL, which had dropped from 31% in FY21 to 13% in FY22.
In an interview to ET, Sanjay Chaturvedi, executive director and CEO of IOL said, as part of portfolio expansion the API maker is targeting both commodity molecules such as paracetamol, metformin which are priced $10 per kg, specialty molecules like fenofibrate (cholesterol lowering), lamotrigine (anti-seizures), clopidogrel (antiplatelet medication), sartans among others that sell at $50 – $100 range per kilo. “We picked our portfolio of products where we focused on operational efficiency, scale and backward integration,” Chaturvedi said.
Chaturvedi said as part of the strategy to focus on the non-ibuprofen business, the company is planning to set up a new plant in western India with an investment of ₹300 crore to produce specialty chemicals and some pharma intermediates catering to customers both in the domestic and export markets. Chaturvedi said they are in the process of finalising the location, and looking to complete the project in 18 months.
The company is also looking to file 4-5 drug master files (DMFs) to be able to sell APIs in regulated markets such as US and Europe. Additionally, the company is also increasing its ethyl acetate capacity by about 20% and from 100,000 metric tons per annum, to increase our market share in this product.
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