Looking at investing Rs 900 cr in greenfield facility: GSK

Looking at investing Rs 900 cr in greenfield facility: GSK

Capital market regulator Sebi on Wednesday announced fresh delisting guidelines. Discussing the move, HB Joshipura, Managing Director of Glaxosmithkline , said parent company GSK Plc has no plans to delist it from Indian bourses. In an interview to CNBC-TV18, Joshipura said the company’s dermatology and oncology business have grown well and that it is looking at investing Rs 900 crore in greenfield facility. Below is the transcript of HB Joshipura’s interview with Anuj Singhal and Sonia Shenoy on CNBC-TV18. Anuj: Yesterday Sebi announced fresh delisting guidelines and that is the question on top of everyone’s mind, would there be any impact on your company? A: No, but I think our worldwide GSK Plc has already made a statement that they have no intention to delist. Sonia: The company has strategically decided to expand its presence in the speciality segment which has grown over the last few years while the mass markets and mass speciality segment has degrown. Can you tell us what could be the segmental break up for the company in the next few years? A: Over the last few years, yes, we have tried to broad base the company. We were largely present in our legacy product in acute segments and then over the last few years we have tried to broad-base it in vaccines and a few speciality areas. That has grown well. We have particularly seen dermatology, vaccines, parts of cardiology and neurology, which have grown well in that part of the business and we expect that to continue to grow and oncology of course. Anuj: Would you share the break up of growth between the verticals? A: That will grow in terms of the market because if you look at these segments, we are market leaders in vaccines, we are market leaders in dermatology. So to that extent both these segments we would go in line with the market. Dermatology is growing at about 15-16 percent in our represented area, vaccine market recently had slowed down, we have grown faster and therefore we should be able to track the growth that we have tracked over the last few years in the time to come. Sonia: You have made Rs 864 crore investment in India to set up a drug manufacturing unit and that has come after quite a long time, what are your remaining capex plans in India now? A: As we have announced, we are looking at investing about Rs 900 crore in a Greenfield facility. This site will be dedicated essentially to serve the needs of India that is intended at this point of time. That is our capex plan at the moment. We are looking at other things as well but when those plans are confirmed, we will talk about it. Anuj: As far as the Indian vaccine business is concerned, what are the new launches and build up of the existing brands? A: I think this year our vaccine contribution should be around 17 percent. That should go up to about 20 percent once this happens. Sonia: What about the margin picture, will it continue to sustain above the 20 percent level going ahead? A: We have always said that our attempt will be to grow in line or slightly ahead of the market and therefore that is where we will try to be. Anuj: As far as this GSK-Dr Reddy’s alliance for emerging markets is concerned, we understand that there has been a lot of expectations which are not yet met and that it is now nearing termination, can you share with us the current status? A: India was never a part of that arrangement and therefore I will not be able to tell you what is the status of that because we are not going to play as far as that arrangement is concerned. Sonia: The company has cash of around Rs 2,000 crore, will that be used for any future acquisitions or any higher dividend payouts to shareholders? A: We do both. So we reward investors as well but equally the new site that we are putting up, some of that cash will be used for that new facility.