TN chemists body to set up distribution firm

The Tamil Nadu Chemists and Druggists Association (TNCDA), an affiliate of the All-India Organisation of Chemists and Druggists (AIOCD), has kickstarted plans to form a distribution company, in which all its members will be shareholders, to manage the pharma trade in the state. This is part of AIOCD's plans to build a pan-India retail chain brand by forming companies in each state and enrolling its members as shareholders.

AIOCD, the apex body of about six lakh chemists and druggists nationally, manages a major chunk of the Rs 50,000-crore pharma trade in the country. AIOCD plans to launch its own retail chain company with a common branding across India to help small retailers retain their business share in face of competition from the organised retail chains being planned by several large companies, M Arulkumar, joint secretary & convener (south zone) of AIOCD, said.

The pharma retail trade has been attracting several corporates such as Big Bazaar, Fabmall, Reliance and Subhiksha. Several players, who are keen entering retail, are reported to have discussed possible tie-ups with AIOCD. 

While AIOCD has already formed a holding company called All-India Origin Chemists and Distributors (AIOCDL) for all policy directives, it plans to form separate companies in each state as subsidiaries. Its first subsidiary company was formed in Maharashtra, a leader in the pharma trade with a share of about 18% of the total pharma trade in the country, where it is reported to have raised a capital of Rs 50 crore.

While the board of the Maharashtra subsidiary will comprise members of the association from different zones, the day-to-day operations and other activities will be managed by professionals. Ernst & Young will be the consultant in implementing the business model, upgrading systems and framing marketing initiatives, among others.