A healthy profit

India’s largest pharmaceutical company, Ranbaxy Laboratories Ltd., is to open up a new Nigerian facility later this year in December: TABJ look back at the history of this pioneering company.

Incorporated in 1961 and going public in 1973, Ranbaxy Laboratories Ltd has a fine tradition of research and development (R&D) going back to the late 1970s when it was almost unheard of for Indian pharmaceutical companies to engage in R&D. This was due to the company recognising at an early stage the importance of research in meeting its global ambitions. It now has over 1,200 R&D personnel working on innovative medicines for the 21st century.

The company’s South African arm Ranbaxy (SA) (Pty) Ltd started in 1996, allowing entry into the African market for the by now global group. Ranbaxy today has a presence in 46 countries, world-class manufacturing facilities in seven countries and serves customers in over 125 countries. The announcement earlier this month that they are due to open a new manufacturing facility in Nigeria, their second plant in Africa, signalled their commitment to expansion worldwide.

‘We are setting up a greenfield manufacturing facility in Nigeria to supplement our manufacturing capability and consolidate our position as a leader,’ according to a recently released 2011 report from the company. It is expected to begin production in the first quarter of 2013.

The new Nigerian plant is to upgrade Ranbaxy’s liquid manufacturing capacity to circa 14 million units per annum and to have the ability to produce up to 100 million units of tablets and capsules per annum. Ranbaxy CEO and managing director Arun Sawhney was reported in the press as saying, “These are the important markets of continent of Africa and emerging markets is our story. It is important for us to be present there in some respectable measure.”

Ranbaxy and Be-Tabs

In 2007 Ranbaxy acquired Be-Tabs Pharmaceuticals, which made Ranbaxy the fifth largest generic pharmaceutical company in South Africa.
Melly Louw, Financial Director of Ranbaxy, says, “With Be-Tabs you are looking at a combined entity. The plant in South Africa is managed by Be-Tabs and they have a dedicated factory where they manufacture most of their products in South Africa. Some are imported from overseas and some are sourced locally.”

Currently the products that Ranbaxy manufactures in South Africa vary. “In the Be-Tabs portfolio there is a split between 60 per cent prescription and 40 per cent over the counter medication,” says Louw.

Company goals

The company is already in very good standing with its South African operation, but Louw explains Ranbaxy’s ambitious goals for success.

“Ideally we would like to go to number four in the race to be number one. Ideally, you want to improve your market ranking and get to the higher echelons of the generics market,” says Louw.

Ranbaxy has nevertheless seen itself become an established quality brand in the South African marketplace and beyond. “We are trying to show that we are not just a generic company but an innovative generic company,” Louw told us back in March last year.

“We have operations all over mainland Europe and Russia and operations in Japan, Thailand and other Far East countries. In Africa we are big and the U.S. is a very big market for us,” explains Louw. “We are also in South America and Brazil is a very fast developing market.”

South African market

South Africa’s markets differ from that of other countries like India, for example, which has a higher emphasis on over-the-counter drugs. “South Africa’s biggest market is the pharmaceutical wholesalers. We supply to wholesalers who ultimately supply to doctors and pharmacies,” says Louw. Louw explains that Ranbaxy is trying to do more over-the-counter products but the main focus is on prescription drugs.

Last year Ranbaxy upgraded their old South African facility to make a brand new, modern one: “It has taken three years to compete. In terms of innovation this is a new facility that is much more efficient and innovative than before.”

Health and safety is something that is also very important, especially when dealing with prescription drugs and consumer health. Louw says, “On the Be-Tabs manufacturing side, we have strong health and safety guidelines in our factories. We take it very seriously and in the factory we make sure we adhere to all government guidelines and regulations.”

Market innovation

Ranbaxy may be known as a generic pharmaceutical company, but it has plans for advancement. The goal of the company is to be known as an innovator in the market place. “It differs in the sense that Ranbaxy has its own research and development unit which stands out amongst other generic companies. In India we have a research and development unit which is not common for generic companies. In our research and development unit we can ourselves develop new products, not just wait for the innovator to come up with something brand new and then create something similar,” says Louw.

Ranbaxy as a whole and Ranbaxy’s South African arm are trendsetters in the generic pharmaceutical arena. This company ethos results in room for growth with its new, quality pharmaceutical products and extensive research.