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Granules to expand API and intermediate capacity

By Gareth Macdonald , 29-Aug-2011

Chemicals maker Granules India says it will expand manufacturing capacity for oral solid dose (OSD) APIs and drug intermediates in a bid to better meet the needs of clients.

Granules spokesman Vijay Ramanavarapu told in-Pharmatechnologist.com that: “We are increasing our solid oral dosage capacity from 6 billion doses to 18 billion doses by adding new equipment in our existing facility [in Gagillapur]”.

 

Ramanavarapu said that: “We are adding equipment for two new workshops here. The first new workshop will have an additional capacity of 8,000 tons and will be finished by March 2012. The second new workshop has a capacity of 1,200 tons and was just completed last month. “

 

He went on to say that the move follows analysis by Granules’ operational excellence (OE) team and is part of a wider project has seen the firm increase metformin and guaifenesin API capacity by 25 per cent and 20 per cent, respectively, over the last year.

 

We are expanding in order to meet the needs of our existing customers and also due to our strong business development pipeline” Ramanavarapu continued, adding that Granules is seeing strong demand for key chemicals across the value chain.

 

Finished dosages faster

 

And, within this, finished dosage manufacturing is seeing the strongest demand said Ramanavarapu, who went on to predict that it will be an increasingly important part of Granules’ business.

 

All three divisions will grow in absolute value but finished dosages, which have higher margins, will grow much faster than the other divisions. We need this expansion to keep pace with our existing order book and are already looking at future expansion beyond these projects. “

 

Granules’ decision to initially focus on meeting the needs of existing customers makes some sense given that, according to the Economic Times, its top ten clients generated 40 per cent of its revenue each year.

 

However, while the existing client base is important, Granules intends to use the additional capacity to win new orders and contracts as Ramanavarapu explained.

 

We are actively looking at new customers and developing our business development pipeline. Since we are focusing on finished dosages, we need to start developing the pipeline now in order to commercialize orders several years out.

 

New JV

 

Granules’ announcement follows a month after it forged a partnership with Belgian fine chemicals firm Ajinimoto Omnichem to establish a $20m (€14m) manufacturing joint-venture – Granules-Omnichem – in Vishakhapatnam, Andhra Pradesh.

 

However, according to Ramanavarapu that deal is separate from the latest expansion. “The JV will focus on high-value, low-volume products for innovator companies while Granules' existing model focuses on high-volume products.”

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