Unichem lines up Rs 350 crore capex for next two years

New Delhi: Drug firm Unichem Laboratories has lined up a capex of around Rs 350 crore for the next two years as it plans to strengthen R&D activity and expand operations in the US market.

The company, which focuses on various therapeutic segments like gastroenterology and cardiology, expects its US revenues to cross $100 million over the next few years.

The long term aim of the company is to cross $500 million in revenues from the US operations.

"One major capex is the API expansion, which is going on, the new plant which is coming up as well as on the formulation side and existing API site," Unichem Laboratories Chief Finance and Compliance Officer Rakesh Parikh said in a analyst call.

Besides, the company is investing on R&D activities, he added.

"If you add all these projects which are in the pipeline, the total expenditure can be almost about Rs 300 to Rs 350 crore, which could be spread out over two years," Parikh said.

The company plans to reinforce its R&D so that it could file for more complex products in the US.

"Since we are planning to increase our filings and work on more complex products, we are open to invest more. It can hover anywhere between 5 per cent to 7 per cent (of total sales on R&D) depending on the various projects which have started," Parikh said.

In previous fiscal, the Mumbai-based company had invested more than 5 per cent of total sales on R&D.

Commenting on the company's US operations, Parikh said the country remains one of the major focus area and one of the major reasons to enhance R&D spend.

"We have to build a critical mass, and inspite of being a late entrant we have already crossed $40 million last year. And in terms of milestones we would like to cross $50 million in the current year and $100 million in the coming years," he added.

Even as the US market remains the focus area, the company would also like the domestic market to account for 50 per cent of the revenues going ahead.

"For us, US remains the fastest growing piece and immediate target would be 50:50 revenue contribution. And in terms of long-term vision, from $100 million would be our first target before looking at the next target of $500 million," Parikh said.

When asked about the number of launches planned during the current fiscal, Parikh said: "We are looking to launch a couple of products in the first half and another couple in the third, fourth quarter. So maybe about three, four products we should be able to launch."

On GST, he added that there won't be a major impact on overall volume and the values for the year as a whole.

"So maybe the quarter one sale may look less, but may be quarter two, quarter three or even quarter four may be much more higher as compared to what industry has been doing year- on-year basis," Parikh said.