Big leap forward

INTERVIEW: M. Narayana Reddy

'We are targeting a turnover of Rs 100 crore this year'

He knows the bulk drug industry like the back of his hand, having been in the fray for over two decades. M. Narayana Reddy, Managing Director, Covalent Laboratories Pvt Ltd, is seeking to invest all the domain knowledge for his own entity. He's not just looking at a big turnover target, but is actively seeking new markets and tie ups.

When did you decide to start your own company and what's been the experience like?

I have done my MSc in chemistry and all along my career I have been involved with bulk drugs. I started Covalent Laboratories in 2002, and before that I was promoter-director at Orchid Chemicals in 1992 and prior to that with Dr. Reddy's Laboratories.

I have, in time, got a fair amount of exposure to different aspects of business: in dealing with finance, marketing, production... and thought it was time to start something on my own. Basically, our company focuses on antibiotic area that work against hospital infections "� that are used to combat both gram positive and gram negative bacteria. And the market for this is good.

Today, Covalent is a fast growing in pharmaceutical industry space, it specialises in manufacturing bulk drug antibiotics in the cephalosporins range for domestic and international markets. We are targeting a turnover of Rs 100 crore this year. We may look at an IPO in a year's time or so, there are no plans for it this year though. Currently, we are ploughing back all our profits to invest in growth and also get into the European block. We will perhaps take some term loans as we go along.

What have been some of Covalent's milestones?

We got ISO 9001:2000 accreditation in the first year of operation. We also have WHO-GMP for all our products and are on our way to get ISO 14001. We supply our products to major pharma companies and to semi-regulated markets in Asia and Latin America. We are now targeting to get US FDA approval to enter regulated markets.

How can SMEs survive in the pharma space today?

It is a very competitive world and SMEs should ideally deal with something innovative and unique to get hold of the market. Otherwise price wars are inevitable and SMEs vanish in no time in front of the major companies who have the advantage of a range of products and have lots of money to crush the small players. SMEs can survive, if they have focused approach and specialise in some areas of its operations.

What is your take on the talent crisis facing the industry today?

Recruiting, retaining and motivating the right talent is absolutely necessary. Talent retention is possible if you properly groom people and show them growth in their careers, along with company's growth trajectory as well. It important to have faith in people and give them the right support.

Are you looking at any tie ups?

We are talking to some people now, however, one needs to have a standing in the market. It's important to prove yourself for some period of time. We are very confident about our growth chart, and people are noticing us. Maybe next year there will some associations in place.

What are the spaces where innovation is possible in your sphere?

There is a great scope for innovation in the area of new-generation pharmaceuticals and technologies. Basically, lot of effort is going into two areas:

Process research that involves innovation and improvements

Product research.