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India's Ranbaxy

plans new

markets push

BANGKOK: Top Indian pharmaceuticals company Ranbaxy Laboratories Ltd said on Monday it planned substantial investments to gain more market share in North America, Europe and some emerging Asian economies.

Ranbaxy's visiting president (pharmaceuticals), Davinder Singh Brar, told Reuters the firm planned to invest $25 million over the next three years on filing costs to gain approval to sell in developed markets.

It also expected to spend $45 million over the same period on setting up a research, development and manufacturing joint venture in India and a marketing venture in the United States in association with its American affiliate, Eli Lilly and Co, he said in an interview.

The ventures were in equal partnership with Eli Lilly.

"The interim years of 1996, 1997 and maybe some part of 1998 will be years where we will be transiting from one kind of a model to another," Brar said.

"What we are trying to achieve in the next three to four years is a transition from a developing country mix, which is now a major part of our international operations, to a developed country mix."

This would mean increased focus on certain emerging markets like China, Central Europe and Russia as well as a thrust into developed countries like Britain, the United States and Australia, Brar said.

"So there will be pressure in the next two to three years as we make this change which is so necessary and fundamental for the company to position it competitively for the post-2000 period," he said.

The Indian blue chip produces and markets pharmaceuticals developed by other firms. The company hopes to develop its own drugs in future.

Brar said Ranbaxy was prepared to spend and was actively looking for acquisitions to make speedy entries into certain foreign markets rather than starting operations from scratch.

"We are looking for acquisitions," he said.

Ranbaxy, he added, expected profits for fiscal 1995/96 ended March 31 to be less spectcular than the net profit of 1.1 billion rupees or 70 percent profit growth of fiscal 1994/95. He gave no figures.

"I think that kind of spectacular growth we will not witness," he said. "But it is not that the results will not be gratifying."

Brar said he expected sales volume to rise between 20 and 25 percent in 1995/96 over the 7.1 billion rupees posted in 1994/95. About 50 percent of Ranbaxy's sales go to export markets.

Expenditure on research and development would amount to about five percent of the value of total sales.

He said lower profit growth was expected because funds raised in 1994 through the sale of shares to overseas foreign investors were now being deployed into new investments rather than into interest bearing deposits.

Two new pharmaceutical-related acquisitions in the United States and Ireland were still taking investments and had not yet started paying back, he said.

The Indian rupee's depreciation against the U.S. dollar in recent months would also have an impact on profits, he said.

(One US dollar 34.13 rupees)-Reuter