Sujatha Biotech plans expansion

Chennai-based Sujatha Biotech, a healthcare and functional food products manufacturer, is planning a pan-India expansion and export of its products through a marketing tieup with Kunnath Pharmaceuticals based in Kerala. The company is also planning to go public with an IPO during fiscal 2011-12 to support its future expansion plans.

As per the agreement, Kunnath Pharma, which presently sells its herbal revitaliser Musli Power Xtra through some 250,000 retail outlets, will market Sujatha Biotech’s products through its distribution channels. Kunnath Pharmaceuticals presently addresses 150,000 retail outlets directly and another around 100,000 outlets indirectly.

With the tieup, we expect to address nearly 40 per cent of the FMCG (fast moving consumer goods) healthcare market in India, said C K Rajkumar, mentor and founder of Sujatha Biotech Ltd. At present, there are 1 million FMCG shops in India and 10 per cent of the products marketed through these shops are related to healthcare, he added.

The alliance is expected to boost sales of the company’s functional food products, memory enhancing health drink and cereal — Memory Vita and herbal healthare product Memory Plus capsules across the country.

The company recently initiated a brand building exercise for its products by roping in cricketer M S Dhoni as brand ambassador. As part of its publicity initiative, it would spend around Rs 7 crore in brand building through advertisements in the near future. It expects to grab 3-4 per cent of the Rs 3,000 crore beverages market in India in next two years, he added.

It is also registering the capsule product with the regulatory authorities in Singapore and Malaysia and is expecting to market to these countries in around 3 months.

With the capsule claims to have clinically-proven to enhance memory, the product needs regulatory clearance from food and drug regulatory authorities of different countries for marketing.

With the initiatives, the Rs 30 crore Sujatha Biotech expects to double its revenues by 2012. It also plans to enter stock market in the fiscal 2011-12 through Initial Public Offering to raise funds for future expansion plans, said Rajkumar. The company would expand its market for the functional food products to European Union in future.