As an essential service, pharmaceuticals may have been one of the sectors allowed to continue production during India’s strict COVID-19 lockdown, but that doesn’t mean 2020 has been an easy year. “It’s been challenging,” admits one of the industry’s foremost figures, Dilip Surana. “Although we have been able to continue our production during the lockdown, there have been a lot of issues to sort out, especially in terms of manufacturing and attendance, and logistics surrounding transportation and distribution,” explains the Chairman and Managing Director of Bangalore-based pharmaceutical formulations and active pharmaceutical ingredients (API) manufacturer and distributor Micro Labs. Given all the limitations in place, it’s not surprising that production has fallen to half the normal output.
However, the priority has been to keep the production line operational, irrespective of the logistical challenges, price increases and transportation obstacles that have been encountered. “Our whole objective has been to ensure that there is a free supply of medicines so that patients are not inconvenienced at any point in time, and that the right product is available at their doorstep,” Dilip says.
In the years since Micro Labs was established in Chennai in 1973 by Dilip’s late father, GC Surana, the company has grown into one of India’s leading healthcare organisations. Core areas of expertise include cardiology, diabetology, ophthalmology, dermatology, pain management, antibiotics, neurology and veterinary. Its pharmaceutical range includes oral solids, oral liquids, topical ointments and injectables. Despite all it has achieved, the company and its executives remain loyal to the founding principle: the provision of quality healthcare solutions at affordable costs. Dilip became responsible for operations in 1983 and is joined on the management team by his brother Anand Surana, who is Director.
Today, its footprint has expanded across India to include 14 state-of-the-art manufacturing facilities and three research and development centres that employ more than 300 dedicated scientists. A sales team of 5,000-plus medical representatives reaches more than 250,000 doctors and 180,000 pharmacies around the country. Since its first export batch of pharmaceuticals to Sri Lanka in 1993, its presence has also grown on a global scale. Currently, Micro Labs is present in more than 50 countries and has wholly owned subsidiaries in the following countries: the US (Micro Labs USA); the UK (Brown & Burk UK); Germany (Micro Labs); Australia (Micro Labs); and Nigeria (Micro Nova Pharmaceuticals Ind). Its manufacturing sites are approved by international bodies including the US Food and Drug Administration, the UK Medicines and Healthcare products Regulatory Agency, Australia’s Therapeutic Goods Administration, and New Zealand Medsafe.
ENLARGING THE FOOTPRINT
When The CEO Magazine first spoke to Dilip in 2016, the executive predicted sustained growth in both the export and domestic markets, especially in light of India’s rapidly improving healthcare system and growing population. Four years later, and accounting for more than 50 per cent of its revenue, India still continues to be his focus. “We will continue to grow domestically and many of our investments will continue to be in the Indian market,” he says. “In the medium-term, we have a strong field force and our focus would be to increase their productivity in order to increase our share of the Indian market.”
But that doesn’t mean he plans to turn his back on the opportunities he has spotted for the business on a global level. The RoW, or Rest of World, markets are a particular area of interest. “Here, we have a similar type of sales model to India. We have done a lot of homework in terms of registration and R&D, and are gradually increasing our team in the field,” he says. There’s always room to grow in the countries where Micro Labs already has a strong presence as well, such as the US and Europe (including the UK, Germany, France and Scandinavia).
In terms of manufacturing – one of its core areas – Dilip hints at future expansion plans for its plants. “In the next four to five years, I expect our capital expenditure on this side of the business to be to the tune of more than INR1,000 crore [US$135 million],” he explains. Of its 14 plants, some have specific geographical focuses. “Our Goa plant is dedicated to regulated markets like the US, Europe, Canada, New Zealand and Australia, whereas our Sikkim plant is just for the domestic market.” Some are mixed-use, such as its seven plants in Bangalore where the operational scope covers both regulated and domestic markets.
“We are also keeping ourselves busy on the manufacturing side with upgrades and adopting new technologies,” Dilip continues. “There was a time when you used to take delivery of a machine and then you wouldn’t look at it for the next 20 or 30 years. Today, technology is moving at such a rapid pace that you end up changing your instruments every few years.” This is something he says the company is embracing in terms of quality and automation.
For Dilip, one of the keys to the company’s success is that, rather than doing everything, Micro Labs concentrates on doing what it does well right. And in this case, those business segments happen to be formulations and APIs.
But another important part of the equation is a determination to keep as much as possible in-house, from the development of its own APIs and formulations all the way through to its marketing operations. “Reliance on outsiders, on third parties, can sometimes put you in an embarrassing position,” Dilip says. “We are focused on trying to keep as much as possible within our control as we know that if you’re not present across the total chain, then you can’t compete.”
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