Moneycontrol
Nov 07, 2017 06:35 PM IST | Source: CNBC-TV18

Will continue to pursue inorganic growth in India & US: Torrent Pharma

In an interview to CNBC-TV18's Ekta Batra and Vikas Dandekar, the Executive Chairman of Torrent Pharma, Samir Mehta spoke about the rationale behind the deal and where it would take the company in the Indian pharmaceutical market.

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The big story from deal street is that Torrent Pharmaceuticals will acquire Unichem Laboratories' branded formulation business in India and Nepal. Torrent will spend Rs 3,600 crore for the acquisition, which is expected to close by the end of this year.

In an interview to CNBC-TV18's Ekta Batra and Vikas Dandekar, the Executive Chairman of Torrent Pharma, Samir Mehta spoke about the rationale behind the deal and where it would take the company in the Indian pharmaceutical market.

Mehta said that Torrent will become fifth largest company in India, with Unichem acquisition, with 3.4 percent market share.

He further said that Unichem has strong equity in the doctor community.

Unichem acquisition will further help strengthen India position, he said.

He mentioned that India has and will remain a priority market and US will be the next most important market after India.

According to him, Indian pharma market is large and therefore, he expects double-digit growth.

Talking about growth, he said we will continue to pursue inorganic growth in India, US and EU.

Below is the verbatim transcript of the interview:

Q: What is the rationale behind the deal and where it would take the company in the Indian pharmaceutical market?

A: Torrent would become the fifth largest company in the Indian market with Unichem acquisition with 3.4 percent market share. Unichem has been a 75 year old business and it has a strong equity with the doctor community. Out of our four key geographies of India, US, Germany and Brazil, India accounts for the largest share of 42 percent and this acquisition would further help us strengthen that position. India in our opinion is amongst the most attractive investment destination for the pharma industry and will continue to remain so.

Indian pharma market grows at around 10-12 percent a year and we believe that this growth is sustainable. There are hardly any other markets in the world which can claim this. Unichem acquisition would help us enhance our position in the chronic care segment. Chronic care segment has higher physician and patient loyalty and with this acquisition we would be better positioned to serve patients in three of the most important therapy areas of cardiovascular, central nervous system and gastrointestinal. It also enhances our position in the specialities. We would become the top companies in 15 out of the 20 major specialities. It also gives us a position in the over the counter (OTC) space with a very strong brand Unienzyme which is a dominant product in the digestive enzyme market.

Q: Taking the point forward about the Indian market because this is in fact your fifth acquisition in the past four years when it comes to the Indian market and the most relevant would be Elder Pharmaceuticals and now Unichem. What does that mean in terms of reprioritising your goals when it comes to India market versus US? Is India the primary market for Torrent Pharmaceuticals as oppose to the US now. Are you re-strategising your focus?

A: Over the last several years India has remained our priority market and would continue to be so. So India would, with Elder acquisition we have been able to strengthen our position, what we were organically building and Unichem acquisition further helps us strengthen that. So while we will continue to invest in the India market as opportunity arises, which are not many, US would be the next most important market for us in terms of building our scale.

Q: You jumped to the fifth rank with this acquisition. There will be challenges in moving ahead in terms of gaining market share because from here on the climb will be tough. You have Sun Pharmaceutical Industries-Ranbaxy Laboratories combine, you have Abbott India, Cipla and Mankind Pharma has been extremely aggressive and it's at the fourth rank. How do you think you will be able to retain this and grow further because between 10th and 20th rank there is a lot of fight. Given the challenges what are the risks that you see going ahead with these acquisition?

A: Indian pharma market is a large and double digit growth market. Therefore, we believe that there would be enough opportunities for several players. We have built our business on a strategy of focusing on chronic care, speciality driven products and sales force productivity which is done for us in the recent past and we will continue to build on that model and we believe that that would do us good in the future.
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