Ambalal Sarabhai plans restructuring

To offer voluntary retirement scheme to around 1,200 employees.

Resurgence is what Ambalal Sarabhai Enterprises Limited (ASE) is aiming for now. The Vadodara-based company is embarking on a restructuring plan in an effort to regain its lost ground in the pharma industry.

It is planning to cut labour costs by offering voluntary retirement scheme (VRS) to around 1,200 employees of the 2,000-strong pool.

The company has been incurring an annual loss of Rs 20-30 crore. ASE has already hired experienced personnel in its sales and marketing department to boost sales.

"We hope to break even by the end of 2008 and strengthen our exports as well. We are also selling off the excess land to raise funds for the restructuring," said GD Zalani, director, Ambalal Sarabhai Enterprises. ASE's annual turnover stood at Rs 100 crore and it hopes to touch Rs 300-400 crore in the near future.

The company has already sold roughly 10 per cent of its land to retail and realty majors like Pantaloons and DLF. ASE, which owns 60 acres land in Vadodara and 100 acres in Ranoli, further intends to sell more land to raise funds.

It is also likely that the factory premises might be shifted to some other location. However, Zalani refused to divulge details of the relocation. He also denied any plans to raise finance through private equity funds or capital market.

The company, which had lost its hold on several generics, will also be focusing on developing new innovative products.

"Since the market is growing in the lifestyle segment, we will be investing in developing new lifestyle products and antibiotics, oncology, anti-diabetics and others," said Zalani.

The company manufactures antibiotics, anti-infective, analgesic, anti-inflammatory, nutritional, oncological and antidiabetic products, among other things.