Torrent investing in capacity to support international expansion
Investing Rs 350 crore ($75m) into production facilities in the Dahej special economic zone (SEZ) will give Torrent the capacity and capabilities needed to expand into regulated markets. Having recently expanded into Mexico Torrent is planning to enter generic markets in UK and Romania.
Expanding into new markets helped Torrent grow revenues by 20 per cent in third quarter results posted last week. Double-digit sales growth was achieved in Brazil, which accounted for almost 20 per cent of total sales, Germany, the Indian formulation unit and a number of other regions.
However, a sharp rise in total expenditure resulted in net profit dipping by seven per cent. Torrent attributed higher outgoings to planned expansions in domestic and international markets. Adverse currency movements also had a negative impact on profits.
Overall sales outside of India grew year-on-year by 43 per cent. This is inline with performance over the first nine months of the fiscal year that has led to overseas sales accounting for 37 per cent of total revenues.
Torrent recorded year-on-year growth in its domestic branded and contract manufacture businesses. Contract manufacture is a small part of Torrent’s business but posted 38 per cent year-on-year growth in the third quarter.
To support growth in India and beyond construction of formulation and active pharmaceutical ingredient (API) plants in the Dahej SEZ is underway and will be completed in 2012, according to Business Standard. Investments are also being made in formulation capabilities in Sikkim, India.
Once operational the facilities in Dahej SEZ and Sikkim will complement its existing production capabilities in Chhatral, which produces tablets, vials and APIs, and Baddi.