Gujarat drug traders to float company

In what may be a pre-emptive measure against the organised retail pharma chains, drug traders in Gujarat are all set to float their pharmacy retail company.

The Federation of Gujarat State Chemists and Druggists Association (FGSCDA), a state affiliate of the 5,50,000-strong All India Organisation of Chemists and Druggists (AIOCD), will launch a company, which will be incorporated by May 2008. The company will take off with an initial paid-up capital of Rs 20-25 crore.

The move is part of AIOCD's plans to set up 30 companies across the country within two years. "A professional body was needed to counter the entry of organised retail chains in pharmacy. It will also help in integrating services to customers like uniform prices, common discounts and offers," said Jashvant Patel, president, FGSCDA.

While FGSCDA is yet to finalise the name, it is most likely to be registered as Fraternity of Gujarat Safe Chemist and Distributor Alliance, said Patel. A promoters' meeting will be held on March 16 in Ahmedabad to discuss the intricacies of the incorporation procedures, he informed.

With over 13,000 members, each member would bring in an average capital of Rs 20,000. The association in Gujarat, which has an annual turnover of Rs 3,000 crore, expects to touch the Rs 5,000-crore mark by 2012 through the incorporated company.

Other state affiliates to have floated companies are All Kerala Chemists & Druggists Company Ltd and Maharashtra State Chemists and Druggists Association Ltd.

About eight more state-level companies including Tamil Nadu, Rajasthan, Madhya Pradesh, Himachal Pradesh, Chhattisgarh, Bihar, West Bengal and Punjab, along with the parent association's company, AIOCD Ltd, will start operations later in the year or early 2009.

AIOCD Ltd, which will act as the supervising and nodal agency for the company, has signed an agreement with Accenture, the US-based business consulting company, to ease the procedure of launching such state-wise companies. It has also appointed Ernst & Young as consultant.