I hope you would find our performance in the financial year ended March
31, 2007 good. Let me highlight the main points therein. Our Sales/
Income from operations (Gross) grew by 17.7% over the previous year to
cross the Rs. 5500 million mark .with profit before tax and before
extra-ordinary gains increasing by 29.7% and profit after tax but
before extraordinary gains and prior period adjustments increasing by
27.0% to Rs 889.9 million from Rs. 700.5 million in 2005-06. Unichems
focus to enhance capital, operational and human productivity has been
the key to this achievement.
In spite of the pricing pressures, the domestic pharma industry
continues to show decent growth rates, led by the chronic therapeutic
(lifestyle) segments like cardiovascular, central nervous system and
anti-diabetic. Higher awareness and exposure to newer therapies at
affordable prices has been the key driver of growth in the chronic/
lifestyle segment. The Indian domestic formulations market is expected
to show better growth in the next fiscal as compared to the current
year subject to any unforeseen developments taking place in the
Unichem Domestic sales of formulations touched almost Rs. 4000 million.
The Company is looking at expanding its domestic portfolio and
strengthen its product portfolio in the domestic market through organic
and inorganic modes. We believe that our brand and marketing
strategies will drive greater penetration and our market share growth
across the Indian market, coupled with our focus on costs, are likely
to accord us superior returns over the medium term.
Our Active Pharmaceutical Ingredients (API) Business recorded a
turnover of Rs. 638 million as compared to Rs. 537 million in the
previous year. The export market is expected to witness a healthy
growth in the coming years due to imminent patent expiries and pro-
generic initiatives across the US & Europe. Unichem is also expected to
benefit from some of these emerging opportunities in the near future
with its expanded capacity and its increased focus of API business
Unichems revenues from International Business grew to Rs. 1303.6
million from Rs. 935.9 million in the previous year registering a
growth of 39.3% and contributing to 23.1% of total revenues against
19.6% last year. International business of formulations contributed
around 75% of the total export turnover and is expected to be the key
driver of growth of future. At present, the Company exports both API as
well as formulations to more than 60 countries across the continents.
Unichem is targeting growth in exports to regulated markets like
Europe, USA and fast growing semi-regulated markets like CIS. The
Companys strategy is to leverage its competencies in R&D,
manufacturing and business development to exploit the increasing
opportunities presented by the generic segment in regulated markets.
The Company got US PDA approval for its API plant at Roha, Formulation
plant at Goa and its first abbreviated new drug approval i.e. ANDA
approval in the year under review. Further, the Company continues its
focus on high value added branded generics in select markets. In
addition, the Company is actively pursuing strategic and marketing
alliances with Companies abroad, in addition to the agreements inked
with Lannet & Pliva in the US markets.
Expansion projects with strong cost-benefit ratio were initiated with a
view to further enhance capital productivity. In this direction,
Unichem initiated and completed several expansion projects including
expansion of its existing manufacturing facility at Baddi (Himachal
Pradesh) and upgradation of its API facilities at Roha & Pithampur.
Growth is imperative for enterprise success. We are constantly scouting
for and evaluating new opportunities of growth that will propel Unichem
to the next higher orbit. The Company acquired balance 40% stake in its
subsidiary M/s. Niche Generics Ltd. (U.K.) during the year under review
making it a wholly-owned subsidiary. You are aware Niche Generics Ltd.
is engaged in developing, marketing and distributing generic
pharmaceutical products in European markets.
Unichem is increasingly investing on enhancing its research and
development capabilities to meet its own requirements as well as to
provide it as a service to the global industry which is under costs
pressure and is looking for outsourcing to low-cost, advanced
capability countries like India.
None of these endeavours would have been possible without dedicated
contribution of our human resources. People are our prime assets.
Unichems quest for value creation would not have been possible but for
the support that my colleagues and 1 received from all the customers,
business associates, shareholders and members of the Board. 1 am
grateful to them for their continued confidence in the management. 1
firmly believe that with the solid foundation that has been laid and
the global market beckoning us, we will continue to create superior
value for all our stakeholders.
Dr. Prakash A. Mody
Chairman & Managing Director