TORRENT PHARMACEUTICALS LIMITED
It gives me great pleasure to welcome you to this Annual General Body
Meeting of your Company.
The results for the year are already with you, and I do hope that you share
my satisfaction with the solid progress that we have made. Our ongoing
programs to manage quality, productivity and costs on one hand, and to
consolidate our strong market position on the other, have yielded good
Your Company has recorded a growth in sales of about 28%, to Rs. 298.73
crore, and a growth in net profit of about 41%, to Rs 33.01 crore. These
are good figures, considering that we operate in a very competitive market.
We are now positioned, I believe, to make the next set of moves in our
quest for leadership in the Great Indian tomorrow. It is about these moves
that I would like to talk to you today.
WHAT DO WE MEAN BY LEADERSHIP?
When we talk of leadership, we are referring to the ability to manage our
environment : our regulatory environment, our industry environment, our
supplier environment and our market environment.
As I see it, the leader in any industry is the company that can most
effectively shape the external environment; a follower is a company that
has to adapt itself to the actions of others. The ability to manage the
environment puts the control of our destiny in our own hands.
In order to shape the external environment, one must generally have
critical mass. I believe that this critical mass is achieved when you hold
the first or second rank in an industry. Big stones make big splashes,
small pebbles make small ripples.
But critical mass alone is not enough. One must also have the ability to
play better than the opposition by the existing rules of the game, and one
must have the ability to change the rules of the game. If one has these two
abilities, one can shape the environment without being a volume leader :
but not necessarily on a large scale, and not necessarily for long.
Ideally, all these factors should be present: size, superior performance,
As somebody said, of another organisation in another market in another
country, `It's good to be big; it's better to be good; it's best to be
HOW FAR ARE WE FROM LEADERSHIP?
In the last few years, we have travelled a reasonable distance down the
road to leadership.
In eight short years, our ranking in the domestic market has improved from
being 36th to being 8th. We have also established market leadership in the
Cardiovascular and Neuro-psychiatric therapeutic segments. It is through
these segments that we build life long relationships with the patient
community. Supported by our forays into basic pharma materials and bulk
drugs, we are now making strong inroads into the fast growing and high
volume anti-infective therapeutic segment. In addition to this, we are also
a niche player in the treatment of Gastro-intestinal diseases.
With our continued thrust on Research and Development, we are not only able
to improve the application and the ease of administration of our products
but we are also able to maintain leadership in introducing a wide range of
new products. Since the year 1990, we have launched 45 new products.
Notable among these are Listril Plus and Listril Forte in low dose
combinations which were recently launched for the first time in the world.
They combine the advantages of an ACE inhibitor and a diuretic which
addresses the problems related with hypertension and other associated
disorders. We have also recently launched Lozapin for the first time in the
country for the treatment of resistant schizophrenia.
INDIA'S MOST INTEGRATED PHARMA GROUP.
It is important now to think in terms of Torrent's healthcare business as
one and to look at your Company together with the Companies it is
associated with. Namely, Torrent Gujarat Biotech Limited, a company which
has been promoted by us and Torrent Exports Limited, the Company which has
invested so much in developing overseas markets for us.
TGBL is India's largest and most automated manufacturer of Penicillin,
which began commercial production just about a year ago, in mid 1995. I am
pleased to inform you that the Company is slated to reach a capacity
utilization of 82% in this month, which is a significant achievement
considering the complexity of the processes involved. In fact, in the first
four months of this financial year, TGBL recorded the highest sales of
Penicillin G in the country. I am also pleased to inform you that
production runs at the recently built downstream facility for semi-
synthetic Penicillins have begun this year and have produced encouraging
results. It is a matter of pride for us that we have developed the
fermentation technology for the production of Penicillin G in our R & D
laboratories, the quality and productivity of which matches international
Torrent Exports is perhaps, the country's largest exporter of
pharmaceutical formulations. It has invested heavily in a network of sales
offices, distributors, dealers and medical representatives and it makes
Torrent products available in over 70 countries. Torrent Exports is
therefore not, let me emphasise, a commodity trader. It has been investing
heavily in developing markets other than our traditionally strong CIS
markets, and the results are beginning to show.
Both TGBL and TEL, therefore, are going to register very significant
growths this year. Add to that your Company's own growth - domestic sales
are up about 23% in the first half of the year - and I believe that we
could be looking at a Healthcare Group turnover of about Rs. 550 crore this
year, growing to about Rs. 750 crore next year. That should catapult us
amongst the top three healthcare players in the country.
I should also add that we are now India's most integrated pharma group,
with a stake in large volume basic raw materials, intermediates, bulk drugs
and formulations. Not many of you may be aware that the Torrent Group has
put in the second largest investment in the Indian pharma industry. The
economies and the efficiencies arising out of this integration are crucial
in our push for leadership.
We have also attempted to ensure that our push for leadership will not be
hampered for want of new molecules. Our joint venture with Sanofi will
give us a constant stream of new molecules. And our investment in R&D
facilities - one of the largest in this part of the world - will, I hope,
result in breakthrough original research. We have recently shifted into our
new research centre built at the cost of Rs. 30 crore. We are further
committed to expanding the scope of our research activities into molecular
pharmacology, long term toxicity, geno toxicity, cellular and molecular
I believe that all these activities will add considerable momentum to our
drive for growth and leadership.
THE NEXT STEPS IN HEALTHCARE.
I have already mentioned some initiatives in the area of new products and
the development of new markets. It is appropriate to mention two more
initiatives at this stage.
Both these initiatives have to do with the changing nature of our external
Over the last few years, the expectations of the patient community have
been changing significantly, particularly in urban markets. Whereas,
earlier, most patients were willing to leave matters more or less entirely
in the hands of a medical practitioner, today's patient is more demanding.
He wants to know more, about his ailment and about the course of treatment
prescribed and he wants a more participative role in the entire process. To
some extent this is reflected, I believe, in the rapid growth of things
such as fitness clubs, of packaged check- up plans at hospitals and
polyclinics, and of products such as healthier edible oils. Today's Doctors
are striving hard to cope with these changes.
In the past we had essentially a supplier relationship with the Doctors and
the patient community. However, I believe that the time has come for us to
change and to move into a mutually beneficial partner relationship in which
we play a larger, more interactive role in disease management. I believe
that both the Doctor and the patient community will welcome these
initiatives and indeed, initial responses have been very encouraging. The
resultant strengthening of brand and company loyalty would be vital inputs
into our drive for market leadership.
A second initiative would be in our relationship with the trader. Unlike as
in more developed markets, the distribution trade in India consists of
thousands of independent operators, not of chains. We have seen trade
structures changing in other consumer markets in India, with franchising
and licensing bringing the trade the advantages of bulk buying, better and
standardised retail management practices, and better customer services. In
markets as diverse as ready-made garments, tyres, watches, restaurants and
consumer electronics both consumers and the trade have welcomed and
benefited from these changes. It is inevitable that these winds of change
will affect our industry as well. We intend to be among the pioneers in
helping our trade adapt to the opportunities in the Great Indian Tomorrow.
Our investments in these areas, once again, will result in significantly
increasing loyalty in a market that is already very competitive.
As you know, we have made forays into areas beyond healthcare - into energy
and financial services. These are areas where, as in healthcare, we see an
opportunity to assume leadership positions.
Your Company, I hope, will benefit from the fact that it belongs to a
large, diversified and focused group. It is this backing that will help
your company in reaching and maintaining leadership in the Great Indian
Place : Ahmedabad
Dated : 23th September, 1996.