You are here » Home » Companies » Company Overview » Mylan Laboratories Ltd

Mylan Laboratories Ltd.

BSE: 524794 Sector: Health care
BSE 05:30 | 01 Jan Mylan Laboratories Ltd
NSE 05:30 | 01 Jan Mylan Laboratories Ltd

Mylan Laboratories Ltd. (MATRIXLABS) - Chairman Speech

Company chairman speech

MATRIX LABORATORIES LIMITED ANNUAL REPORT 2005-2006 CHAIRMAN'S REPORT Dear Fellow Shareholders, At Matrix, we are proud to have reported another year of positive divergence in 2005-06 - more than four per cent increase in gross turnover and a 40 per cent growth in post-tax profit on a standalone basis, at a time when generic prices have generally declined and industry margins are under pressure. On a consolidated basis, we reported gross sales of Rs 11,861.51 million and a post-tax profit of Rs 1,992.05 million for the year under review. However, at Matrix, the biggest transformation has not been in our numbers; it has been in our mindset. A mindset that emphasizes that we will source material from wherever in the world it is cheapest, manufacture wherever it is most economical and market wherever our products fetch the highest realizations. Forces shaping the pharmaceutical industry First-The global pharmaceutical industry is consolidating faster than ever before. What used to he more than 13 global generic companies is now a mere five; Teva bought out Ivax to create the largest generics prescription company in the world, Novartis acquired Hexal and Sandoz acquired Durascan. This growing consolidation is a bid to share resources and capabilities to shrink time-to-market and grab a larger share of the market. Second-Consumers are increasingly aware of global price differences resulting from price controls imposed by foreign governments. They are more willing to seek less expensive alternatives such as switching to generics and sourcing medicines across national borders. The consequent pressure on costs has resulted in pharma players preferring to establish a presence in low-cost destinations and expanding their global presence to gain footprint in a particular geography. Third-Large investments in new drug research and development, the probable risk of zero returns on some of these investments (should the product fail to reach the market) and massing litigations are promoting the 'sharing risks and rewards' concept. As a densking strategy, corporates are also building new services and capabilities. Gearing ourselves towards transformation At Matrix, we progressively de-risked our business through acquisitions or alliances with six companies in 2005-06 in exchange for the following benefits One, geographic benefits For instance. a controlling stake in the Mchem Group will help us leverage China's advantage in pharmaceutical intermediates; we will source intermediates from that country, convert into APIs at our facility in India for onward dispatch to our customers. Two, our acquisitions in Docpharma will provide us with a robust marketing and distribution platform for future products. resulting in a direct presence in Europe and the generically under-penetrated Belgium, Netherlands, France and Italy For instance. we have developed a number of finished dosage forms and we will be able to leverage our Decpharma acquisition to distribute these product across Europe. Three, our interests in Concord, Fine Chemicals and Explore will enable us to enter exciting, new and synergistic areas. Going forward, these acquisitions will provide us with control across each points of our value chain, sustainability in our business and attractiveness in our revenues. Outlook At Matrix, we are optimistic about our future for the following reasons: - The demographics of developed countries indicate that since people are living longer they will read effective remedies. - A number of untreated patients in the developing countries within our existing therapeutic categories indicate a large unmet need for HIV/ AIDS. - Growth in Matrix's presence in the regulated and emerging markets worldwide. - Room to improve upon existing therapies and introduce treatments where currently none exist. - Global emphasis on the need to find solutions to difficult problems in our healthcare system. At Matrix, we are addressing these opportunities through the following actions; - Building a product portfolio intended to stabilise the volatility of individual products or markets. - Acquiring a number of companies globally that represents a neat and synergistic fit with our business model. - Pursuing a large number of new product launches. In 2006-07 and beyond, we will continue to focus on cur customers, implement the enunciated strategies and improve our technology, service, quality and cost-effectiveness. In doing so, we expect to make Matrix an even stronger Company over the coming years. Sincerely, N. Prasad Executive Chairman