Aurobindo to invest $1billion in Europe

Hyderabad-based pharma company Aurobindo Pharma, which has plans to emerge as a billion dollar company by 2009-10, is enhancing its presence in Europe by investing $100 million in phases.

The company is likely to buy two pharma companies worth Euro 10 million each, open offices in 10 countries and establish a packaging, warehouse and manufacturing hub in Malta.

Besides Europe, Aurobindo may make strategic investments worth $10 million in the Gulf Cooperation Council (GCC) countries. Its upcoming active pharmaceutical ingredients (API) manufacturing plant at Annapolis in Brazil will cost of $8 million.

"All this will be completed in a year's time," Aurobindo chairman, PV Ramprasad Reddy, said, adding that talks to buy two European companies were in advanced stages. Aurobindo is also holding talks with six companies in the GCC countries to finalise partnership deals.

The company may start commercial operations of two anti-diabetics products in the US by the second quarter of the next financial year. It already has a manufacturing unit in New Jersey.

With over 117 filings to its credit, the company has emerged as a leader in filing drug master files (DMF) for APIs in the US. The company has filed over 107 abbreviated new drug applications (ANDAs) in the US.

"Our operations are also picking up in South Africa, where our sales turnover is expected to touch $3 million this year," Reddy said.

Aurobindo has been focussing on the formulation business for some time. Its Rs 1,000 crore (Rs 10 billion) investment in R&D and manufacturing infrastructure in the last four years has started yielding results. The company achieved formulation sales of  Rs 697 crore (Rs 6.97 billion) in 2006-07 against Rs 274 crore (Rs 2.74 billion) in 2005-06 on a consolidated basis.

Aurobindo may post a consolidated turnover of Rs 2,500-2,700 crore (Rs 25-27 billion) in the current financial year against Rs 2,250 crore (Rs 22.50 billion) during 2006-07, according to Reddy.

Besides the overseas projects, Aurobindo is setting up a Rs 170 crore (Rs 1.7 billion) formulation unit in two phases in a special economic zone of the Andhra Pradesh Industrial Infrastructure Corporation near Hyderabad.

Aurobindo's product portfolio is spread across six therapeutic areas.

Reddy said the company's ARV (anti-retroviral) business was expected to grow 50 per cent, from $10 million to $15 million per month, next year. Being an integrated player, the company does not expect any significant growth in the API business due to captive consumption.