India's Syschem splashes out on plant expansion

By Emilie Reymond

- Last updated on GMT

Related tags Pharma industry Chemistry Pharmacology Pharmaceutical industry

Indian chemical firm Syschem is planning to splash out up to $15m
(€11.4m) over two years to expand its manufacturing capacity – a
move the company said will facilitate its smooth entry into the
pharma industry and help cope with expected domestic demand.

Last November, the company said it had decided to move from being just a contract manufacturer to making and selling its own active pharmaceutical ingredients (APIs) and intermediates, in a bid to capitalise on the booming Indian pharmaceutical market.

Syschem said it plans to start by making three of its own molecules from "the leading therapeutic categories", which will be produced at its manufacturing facilities.

Anil Nibber, the company's managing director, said that the investment will be made in two steps, starting with the upgrade of existing manufacturing and R&D facilities, investing a first $5m in order to be ready for the launching of the new molecules.

The second phase of the expansion will see the creation of a new facility, which will cost between $8m and $10m.

Nibber said the overall process will take between 12 and 24 months.

In addition, the company is looking for funding to raise about $10m in order to become a "totally pharma orientated" manufacturer.

The company is one of a number of Indian drug companies that are starting with basic chemistry offerings and gradually expanding their business into other areas with the aim to becoming global pharma industry players, utilising both organic growth as well as mergers and acquisitions as they seek to boost their presence in existing markets and open up new ones.

Syschem, having built up strong process chemistry skills, which has helped it develop complex processes for APIs and intermediates that do not infringe currently patented processes, is now using this expertise to take it to the next level.

Under the country's 25-year process patent system, Indian companies have particularly perfected their scientific, technical and manufacturing skills to match the requirements of global drugmakers that are increasingly seeking to offshore many manufacturing activities previously performed in-house.

Meanwhile, besides development of new molecules, the firm has substantially increased its revenues from contract manufacturing and still plans to carry on with this lucrative side of the business as it expects the demand for these services to continue to increase.

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