I am happy to be back in the thick of action as the Group CEO. It isnot long ago when I decided to move into a non-executive role and stay in business withBoard oversight. Indeed the times are not exciting for the pharmaceutical industry andStrides is no exception. FY 2017-18 was one of the most challenging years for ourbusiness.
Our performance was impacted by the challenges in the US market and theinstitutional business.
Our strategies especially in our US partnered business did nottranslate to expected outcomes. The environment was not very conducive in our therapeuticareas on the institutional front.
We are going through a phase of temporary hardship and I am confidentthat all our businesses will start performing at desired levels in the next three-to-fourquarters. I must also emphasise that our strategy continues to evolve; and with the newrigour that we have established at Strides we are determined to bounce back strongly.
The US continues to be our key growth market. We are recalibrating ourUS strategy by reinforcing our focus on the front-end business to ensure sustainablefuture growth. We are strengthening our US footprint with an emphasis on niche products orproducts where we have complete control.
We have made strategic progression in Australia (Arrow) over the lastfew years to become a leading and profitable player. The year witnessed steady businesswith a sequential ramp-up driven by expansion of pharmacy footprint new product launchesand a strong performance in Chemists Own OTC portfolio. In August 2017 Arrow acquiredAmeal Pharmaceutical's Australian operations which we could smoothly integrate intoour business in a short span.
During FY 2017-18 we also announced our intent to merge the Australianbusinesses of Strides and Apotex which is subject to certain customary closing conditionsand statutory approvals including approval of Australian Competition and ConsumerCommission (ACCC).
The combined entity will create an industry-leading position inAustralia both by value and volume as a large proportion of pharmacies will offer Arrowand Apotex products exclusively. It will also take the best of both companies to optimisethe viability of operations through effective delivery of medicines and services toconsumers and patients. The merger will deliver 100+ additional products which cansignificantly contribute to growth profitability and IP for the merged entity in themedium to long-term.
In the other regulated markets outside the US and Australia ouroperations in the UK and parts of Europe are growing encouragingly. We also entered thehighly regulated South African market with the acquisition of Trinity Pharma. This willcontinue to help us broad-base our business outside the US.
Our Africa business is maintaining steady growth on the back ofsecondary sales. We intend to grow the business through our 500-product pipeline andencourage a pan-Africa branded generics presence. We are strengthening our sales force forenhanced market penetration and focussing on improving the productivity of our salesrepresentatives.
Our institutional business saw one of the toughest years owing to adecline in anti-malarial business driven by skewed tendering activity. We will be aimingto capitalise on our WHO-approved manufacturing facility in Kenya for global donoragencies and local government tenders. We have initiated the site transfer for ourAntiretroviral (ARV) portfolio to the facility; and will participate in global donorfunding and regional government programmes.
During FY 2017-18 we de-merged our select API business to SolaraActive Pharma Sciences Limited (Solara). It also houses the Human API business of SeQuentScientific Limited. Operating as a standalone API company Solara has inherited theextensive pharmaceutical experience of these two entities.
We also propose to divest our shareholding in Strides Chemicals whichhas an USFDA API facility in Ambernath to Solara. As part of the transactionunderstanding Solara has offered the Company long-term development and manufacturingarrangement and a Most
Favoured Customer' status for all the DMFs required for theintegrated formulations portfolio of the Company. The divestment will help Strides becomeleaner while retaining supply chain security for the formulations portfolio.
Our India branded business was divested to Eris Lifesciences forRs.5000 Million to focus more on our global business strategy. Net proceeds from thistransaction were used to reduce our debt.
A business needs to constantly course-correct and focus on building theright enablers to move forward on the evolution curve. That's precisely what we arenow focussing on at Strides and we are keeping vigilant eyes on the unfolding macroscenario.
We completed several corporate initiatives that we had planned. Now weare focussing on building Strides as a diversified B2C player and we are confident that weare building it right.
On behalf of the Board and the entire leadership team I thank ourpeople for their dedication and hard work. I also express my sincere appreciation to allour stakeholders for their guidance and support.