While majority of India's drug companies are concentrating on generic or copycat drug exports or contract manufacturing and research services (Crams) as their business model for growth, a new breed of companies run by established pharmaceutical players such as Alkem Laboratories, Divi's Labs, Plethico and Mission Vivacare are emerging in the field eyeing potential opportunities in the nutraceutical segment.

Nutraceuticals, consisting of dietary supplements and functional foods with curative or nutritional benefits, are estimated to have a sales of $190 billion globally by 2010. India's food supplement and health food market is estimated currently at about $400 million.

The country already has a clutch of established players focussing in this segment such as Avesthagen, Himalaya and Sami Labs - all Bangalore based companies, besides numerous established players in the Ayurvedic segment such as Dabur [Get Quote] and Charak.

The Rs 1,000-crore (Rs 10-billion) plus Alkem Laboratories, one of the top ten domestic pharmaceutical companies, has entered into the health food and nutraceutical segment in a big way with an investment of over Rs 100 crore to create exclusive manufacturing facilities.

Its nutraceutical arm -- Alkem Health Foods -- is expected to generate a turnover of over Rs 300-500 crore (Rs 3 to 5 billion) annually within a few years, according to Samprada Singh, chairman, Alkem Laboratories.  

Plethico is another emerging company specialising in the field of nutraceuticals.

The company, which recently acquired a $100 million nutraceutical company named Natrol Inc in the US, is planning to launch its 700 odd products in India and other global markets.

Plethico, which is also setting up a Rs 100 crore (Rs 1 billion) plant in Dubai to make medicated lozenges, is targeting a turnover of over Rs 3,000 crore (Rs 30 billion) within five years.

The company, earns over Rs 100 crore (Rs 1 billion) per annum from contract manufacturing for other companies, had recently announced to trim its contract manufacturing operations due to squeezed margins resulting from inflation and high raw material costs.

"The potential for nutraceutical products are huge all over the world, especially India. Now doctors are increasingly prescribing food products fortified with oxidants. For example, doctors now widely prescribe Omega-3 and fish oil as a defence against diabetes and cardio vascular diseases.

Similarly, protein supplements for muscular growth also have good demand," said Sharad Kasalre, who recently shifted to Plethico's nutraceutical venture from Alkem Health Foods, where he was heading its nutraceutical foray.

Divi's Laboratories, one of the major Indian contract manufacturers with a turnover of Rs 738 crore (Rs 7.38 billion), has identified the nutraceuticals business as one of the the future revenue driver for the company and has set up a Rs 35 crore (Rs 350 million) nutraceutical plant and  a separate arm, Divi's Nutraceuticals.

The company has already developed potential vitamin products such as Astaxanthin, Betacarotene, Canthaxanthin and Lycopene. 

Akkshay G Mehta, managing director, Mission Vivacare, notes that the World Health Organisation has predicted that the dietary supplements market would reach $5 trillion by 2050, with a growth rate of 11 per cent every year. If India garners a small pie of this business, it would be still a big business for Indian companies.

Mumbai-based Mission Vivacare, a pharmaceuticals products manufacturer and exporter since 1994, is converting itself into an exclusive nutraceuticals player.

The company is investing over Rs 80 crore (Rs 800 million) in modern manufacturing facilities to launch its products globally in a big way under the brandname - Mission VivaPrime. Its prime targets are the US and European regulated markets, which will have a potential nutraceutical market of $75 billion by 2013.