Surya Pharma Plans Rs 250-crore Foray into Healthcare Retail

Source: http://www.outlookindia.com/
March 24th, 2009

Chandigarh

Surya Pharmaceutical today said it is foraying into the healthcare retail by opening around 500 outlets in the next three years at an investment of Rs 250-crore and expressed the hope that the retail segment clock a turnover of Rs 800 crore by 2011.

Besides, the company has also decided to acquire two pharma companies with a sum of Rs 100 crore in a bid to consolidate its position in the pharmaceutical market.

"The presence of huge spurious drug market along with increasing number of life style and stress related ailments prompted us to foray into healthcare retail," Surya Pharmaceutical Chairman and Managing Director Rajiv Goyal told reporters.

Goyal said the proposed capital expenditure of Rs 250 crore on retail segment would be met through a combination of promoter's equity, venture capital and private equity and borrowings from banks.

Surya Healthcare has been floated to look after retail business. The company, as per the proposed plan, would initially open 100 stores in Delhi and NCR region by March 2010 under the brand of 'Viva'.

"Thereafter, the other parts of the country would be covered to take stores' total strength to 500," he said.

Health and Fitness Report

The company-owned stores, ranging from 150 square feet to 1000 square feet, would sell medicines as well as health and fitness products, Goyal said.

The firm is looking to achieve sales of Rs 800 crore by 2010-11, which would constitute 35 per cent of Group's total turnover, from the new business .

Surya Pharmaceuticals President Mr. Hari Om Bhatia said, "...The pharma market is growing at an annual pace of 15 per cent with a total pharma retail market size of Rs 40,000 crore and organised players in retail have only 3 per cent share..."

Bhatia expects the organised players' share reaches 20 per cent in the next three years," he said.

Besides, the firm is planning to acquire pharma companies in Germany and India for a sum of Rs 100 crore.

"We are in talks with German based logistics provider to pharma industry and a manufacturer of formulations for acquiring them. But it will take some to time get things materialised," said Goyal.

Surya Pharmaceuticals is also in the process of setting up a new greenfield facility at Jammu entailing an investment of Rs 60 crore for catering to US and European markets. It is expected to be commissioned in two months.

"This facility will make sterile products and antibiotic range and we expect to get US FDA approval within the next 9-10 months for having access to regulated markets. Besides, we will also export products to Australia, New Zealand, Middle East countries from here," he said.

Surya Pharmaceutical is a manufacturer and supplier of pharmaceuticals, API's, Fine Intermediates, formulations, herbal products and Mint/Menthol derivatives. The company is expecting to touch sales of Rs. 1500 crore in 2011.