Aurobindo Pharma bets big on injectables from Unit-IV plant

Plans to expand capacity of its Unit-IV plant to $100-120 million per annum in the next 6 to 8 quarters

City-based drug maker Aurobindo Pharma is aiming to expand capacity of its Unit-IV specialised injectables manufacturing plant to $100-120 million per annum in the next 6 to 8 quarters, a top company executive said.

At present, this capacity is $30 to $36 million.

The plant, inspected by the US Food and Drug Authority in September 2012, started commercial production in March this year.

"The current run rate for injectables from Unit-IV is approximately around $2.5 to $3 million per month. It has capability of reaching around $8 to 10 million in the next 6 to 8 quarters.

"At the time of inspection there were 18 products filed from unit IV. Out of which we have got approval for four products. As of now 31 products have been filed for approval from unit-IV and we will reach 100 products in the next 5 to 6 quarters," APL MD N Govinadarajan said.

He was talking to reporters on the sidelines of Annual General Meeting of the company yesterday.

Overall, the company has filed 280 products (from all the facilities) for approvals and got approvals to the extent of 160.

Replying to a query, Govindarajan said the company has loan book of $620 million out of which $420 million is working capital and rest is long term loan.

Commenting on the appreciating dollar against rupee, he said "as revenues of the company are mostly from exports, there is a natural hedge.

Aurobindo's revenues from exports stood at Rs 4,043 crore during the last fiscal against Rs 3,087 crore during FY 2012, registering growth of 31% on standalone basis.

"When the company is growing, the working capital requirement will also go up. The rate of interest on the loan is on average is 3%. For us the predominant revenues are by dollar. So there is a natural protection on that account," Govandarajan said trying to allay fears on dollar appreciation.

Aurobindo has plans to double its revenues in the next three years by execution excellence and operational improvement, K Nityananda Reddy, Vice Chairman, Aurobindo Pharma, said in the annual report.