'Global dominance' is Dr Reddy's aim

It had been able to achieve a much greater predictability in the business: G V Prasad

Dr Reddy's Laboratories' chairman, G V Prasad, says the management is well on course to building it as a "dominant global pharmaceutical" entity, with inorganic growth and globalisation the driving theme.

He said it had been able to achieve a much greater predictability in the business. A stage had been reached where the growth would be smoother in contrast to the low and high performance cycles it had previously gone through.

"We are still under-leveraging our capabilities but are very focused on building a very strong organisation in terms of competitiveness," Prasad told the audience at an endowment lecture event on Tuesday evening.

After successfully passing through the initial phases of building a company with international-scale operational and product capabilities, DRL had focused on a large number of acquisitions, though of small size (except in the case of Betapharm, Germany) in the past decade. It had also entered business development alliances with global companies and partners for access to markets, products, technologies and talent. This, he said, was the right way to continue.

The journey had been from a small chemical ingredients company in the 1980s to India's second largest pharma generics entity, with Rs 13,000 crore of yearly revenue, by spreading across all important product development areas, including drug discovery and niche biologics. Thinking long-term was the underlining mantra, said Prasad.

"All the decisions are taken on a long-term basis. We don't mind paying a short-term price in that process. Many times, we have suffered by taking a long-term view. We had some variability in our performance but, overall, it has helped us build a much more sustainable organiation," he said. For a few years, the company went through cycles of low and high performance but it had now crossed that stage, he said.

On managing the company, DRL had introduced the concept of business units, empowering heads with end-to-end profit and loss responsibility, transparency in decision making, a high degree of tolerance for errors and process orientation in place of individual supervision. These have helped make it an employer of choice and a powerful organisation, he felt.

However, he admitted, excessive process orientation had led to some level of bureaucracy and complexity, creating barriers to simple actions and agility.

While terming the Betapharm acquisition one of the strategic mistakes, Prasad said the company had appetite for risk taking. "I am very comfortable about the risks we are taking because we have restricted ourselves to the pharmaceutical business. Within the industry, we did take high risks. Dr Reddy (founder-chairman K Anji Reddy) himself was a great risk taker - it worked very well sometimes but at other times, could have its (ngative) impact," he said.