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Granules India tabletting plant to come onstream in August

By Pete Mansell , 16-May-2007

Contract manufacturer Granules India is moving towards vertical integration, with a new tabletting facility scheduled to come onstream this August at the company's Gagillapur site near Hyderabad in India.

Granules started building the tabletting facility, which can handle all oral solid-dosage forms (tablets, caplets, softgels, effervescent tablets) and will have peak annual capacity of 12 billion tablets/caplets per year, in 2005.

 

 

 

The Indian company already runs a pharmaceutical formulation intermediate (PFI) plant, one of the world's largest with manufacturing capacity of 7,200 metric tonnes per annum and 6 metric tonnes per batch, at the Gagillapur site.

 

 

 

In its initial phase the tabletting plant will have annual capacity of 6 billion tablets, which will expand to 12 billion tablets within a year, Granules said. The company has invested Rs 60-70 crore (€10.84m-€12.64m) in the new facility, its first for finished pharmaceutical dosage forms.

 

 

 

Tablets and other oral solid dosage forms will be manufactured at Gagillapur from the active pharmaceutical ingredients (APIs) and PFIs currently generated by Granules at its Indian plants in Gagillapur, Bonthapally (paracetamol APIs) and Jeedimetia (APIs and PFIs).

 

 

 

Granules has been a pioneer in PFIs, pre-processed blends of single or multiple APIs that are ready to be compressed into tablets or filled into capsules. The concept is similar to bulk drug intermediates, where bulk drug manufacturers handle the final steps of synthesis from outsourced intermediates to reduce the overall cost of production.

 

 

 

The company has also been reducing its reliance on third-party suppliers for its paracetamol APIs. Early last year Granules completed a major expansion of its existing paracetamol API facility at Bonthapally, raising its annual capacity from 3,600 to 12,000 metric tonnes. The new dedicated paracetamol plant has now been audited and approved by the US Food and Drug Administration (FDA) following a special inspection request from Granules.

 

 

 

FDA approval "will help us get into high-value combination products of acetaminophen at the formulations level, apart from giving comfort to our customers that Granules adopts the highest standards of quality management, even for a product like acetaminophen where having an FDA-inspected plant is not a prerequisite to be a supplier", commented the company's managing director Krishna Prasad.

 

 

 

At the same time, Granules' PFI facility at Gagillapur has been re-audited and approved by the FDA, following the submission of an abbreviated new drug application by one of the company's customers in the US.

 

 

 

To support its vertical integration strategy, as well as other recent moves such as the acquisition of a 50 per cent stake in China's Hubei Biocause Heilen Pharmaceutical (the two companies are forming a 50:50 joint venture to manufacture and sell ibuprofen and other APIs), the Indian company has been raising funds through a succession of equity placements.

 

 

 

The latest of these, which is awaiting approval from Granules' shareholders, is the issue of up to 2,200,000 shares to International Finance Corporation (IFC), the private equity arm of the World Bank, at a price of Rs 118.10 per share to raise around US$6m (€4.4m). This would give IFC an 11.48 per cent stake in the post-issue capital of Granules. IFC is also considering long-term loan assistance of US$9m to the Indian company.

 

 

 

The IFC placing would be "the last round of major equity dilution for the company in the foreseeable future and marks the completion of the current fund-raising exercise that Granules announced in December", Prasad noted.

 

 

 

Previous share issues have included 2,211,200 equity shares (around a 13 per cent stake) at Rs 105.50 per share to the US-based ISP Investco LLC; and 2,180,067 shares (14.78 per cent) to Ridgeback Capital Asia Ltd.

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